End of Year Property Market Update for 2023
As 2023 draws to a close, here at Ayre Real Estate, we are reflecting on the year that was in terms of how the property market has performed. We look at some of the key influencers of the real estate market this year and the impacts on both the Sydney City and Inner City markets and various sectors, including houses, apartments, rentals and sales. Our insights also include some predictions for the real estate market in 2024.
We look forward to continuing to assist you with your property goals in the new year.
In 2023, several high-quality properties hit the Sydney City and inner-city apartment market, which would have been swiftly secured in previous years, indicating a changing landscape. Winter, in particular, August saw a strong uplift in the number of listings in Sydney, bringing the traditional ‘busy period’ of spring forward.
Forecasts anticipate a general shortage of new units in Sydney and Melbourne over the next few years, fueling market momentum in the apartment segment. We believe that current market conditions present a remarkable opportunity for savvy buyers to invest in apartments.
In the suburbs of Sydney, downsizers are hesitant to sell their properties due to negative market sentiment and a reduced sense of urgency. Consequently, upsizers seeking larger accommodations face limited options, maintaining the competitiveness of markets driven by upsizers, such as family homes.
In addition, elevated costs, interest rates, and inflation have compelled vendors to divest surplus investment holdings, expanding choices for buyers. These factors have decreased the number of buyers entering the apartment market, a segment traditionally supported by downsizers and investors.
We expect this trend to persist throughout the first half of 2024 until either rate increases stall or rates decrease. Predictions indicate a potential decrease in rates in the second half of 2024. This might encourage downsizers to take advantage of the opportunity and make a move and investors to become more confident.
In 2023, Sydney dwelling values increased by approximately 7%*, setting a record high that is expected to be surpassed again in 2024. 2023 saw a complete price recovery from the downturn of 2022 in the Greater Sydney market.
The key influencers in 2024 will be strong population growth fuelling demand, lack of supply and of course, interest rates. Rent rates have increased to unprecedented levels this year, coinciding with historically low vacancy rates. Borrowing power experienced a significant setback in 2023, compounded by the cost of living. Perhaps one of the most influencing factors, though, is consumer confidence, which we are yet to see return from its downturn in mid-2022 despite reported record growth in property values.
In the Sydney City and Inner-city apartment markets, we are witnessing the highest demand for apartments with premium facilities, including a pool, outdoor space, and properties with views. Multigenerational living dynamics are developing a trend towards buyers favouring larger penthouse-style apartments capable of accommodating extended families.
We anticipate the Inner-city apartment market may see general growth of around 5% in 2024, aligning with expert predictions for the broader Sydney market. However, it’s crucial to note that the Inner-city apartment market is highly specialized, with substantial variations in prices and demand among different buildings and apartments.
For an up-to-date appraisal of your property, please get in touch with our team to get the most accurate estimate of its value.
*As reported by Domain.com.au
We are for apartments.
If you are considering buying, selling, leasing or property management in Barangaroo, Sydney City, Millers Point, Circular Quay, Pyrmont or surrounds, we would love to help you. Ayre Real Estate specialises in apartment living and ready to help find your ideal property. Talk with us today to find out more.
