Sydney’s housing market has reached an unprecedented high, reflecting its most significant quarterly increase in two years, driven by heightened competition and recent interest rate cuts. According to Domain, the median house price surged by 2.6% from March to June, marking an all-time high of $1.7 million.
This uptick represents the quickest quarterly growth observed in the last two years. Notably, South Wentworthville in the western suburbs experienced the steepest price rise of 37%, elevating its median house price to $1.25 million. Other suburbs showing strong growth include Cammeray (26%), Sans Souci (23%), Bankstown (21%), with both Lakemba and Mount Pritchard at 20%.
While these suburbs have gained momentum, the most expensive areas remained relatively stable. Bellevue Hill leads with a median price of $9.9 million, followed by Vaucluse at $7 million and Bronte at $6.2 million. Conversely, the most affordable suburbs are Oxley Park ($757,500), Werrington ($760,000), and Tregear ($780,000).
According to Nicola Powell, Domain’s chief of research and economics, the demand has shifted towards the western suburbs as buyers seek more affordable options, contributing to the price growth in these areas.
The apartment market has mirrored this growth, with median unit prices rising to $834,000 in June, a 1.5% increase from $822,000 in March. Suburbs witnessing the highest unit price growth include Forest Lodge, Kingswood, and Darling Point, the latter of which boasts a median of $2.9 million for its units. In contrast, Mount Druitt, Cabramatta, and Fairfield remain the most budget-friendly, with unit prices around $430,000.
Interest rates play a crucial role in this dynamic, as the Reserve Bank reduced them for the first time in over four years in February, followed by another cut in May. As of July, the central bank has held rates steady at 3.85%.
In summary, Sydney’s housing market is experiencing a remarkable transformation as rising prices in previously less sought-after areas, coupled with substantial increases in unit costs, indicate a shifting landscape, primarily influenced by buyers’ pursuit of affordability amidst favourable interest rates.