End of Quarter Property Market Update - Q1 2023

The team at Ayre has welcomed an energetic start to the year, with solid levels of enquiries and attendance at inspections.

Our sales team achieved 19 sales in the first quarter equating to over $61 million in total value with an average price of $3.218 million. On the rental side our team has leased 85 properties and met with over 370 potential tenants at inspections, a fantastic achievement.

Prestige real estate proving resilient

Prestige real estate in Sydney CBD and Pyrmont has proven resilient in both sales and leasing, despite broader economic factors in the first quarter of this year. Buyers in the top end of the market tend to be less susceptible to interest rate rises as many aren’t as reliant on borrowed funds.

Despite several interest rate rises this year we’re finding that buyers are returning to the market now after stepping away for some time towards the end of 2022. The latest Consumer Price Index indicates that inflation is easing somewhat, the Reserve Bank of Australia’s decision in April to keep the cash rate on hold is producing further reassurance and many economists are predicting that interest rates might start to correct, and even potentially reduce later this year.

Buyer confidence returning

Undoubtedly this will improve buyer sentiment, but savvy buyers are already recognizing the silver lining of interest rate rises and taking advantage of higher stock levels and the increase of choice on the market now. Investors are observing that the rental market is very strong - returning higher than usual rents and low vacancy rates. There is significant rental demand for 1, 2 and 3-bedroom apartments in the City, Pyrmont, and surrounding areas and rental returns have increased significantly over the past 6 months.

More foreign investors and expats in the market

We’re seeing more foreign investors and ex-pats in the market which has impacted both the rental and sales markets in our core areas. Professional tenants want to be in the centre of the action - close to the CBD, work, the harbour, and surrounded by the amazing amenities on offer in our beautiful city. Investing in the Australian property market is still attractive to foreign buyers, due to our unbeatable lifestyle and track record of economic stability.

Property values to even out mid 2023

We certainly aren’t seeing pre-COVID prices in the market, but we expect to see the floor in values reached by the middle of this year. CoreLogic reported Sydney home values were down 10% across the board in March, however, highlighted a lot of variation across markets, which is in line with what we are witnessing. The apartment market has also been more resilient than the house market to the global supply chain disruptions and worker shortages that have caused significant price escalations and delays to development projects.

Buyers should move quickly

Given what is on the horizon for the property market, our view is buyers should consider moving quickly to secure their preferred property before the possibility of a market increase - our prediction is this might even occur in the second half of this year. Between now and then, we expect the market to remain consistent and somewhat resilient in our core areas of Sydney City, including Sydney's CBD, Pyrmont, Circular Quay, Hyde Park, The Rocks, Millers Point, Walsh Bay, Barangaroo, Darlinghurst, Surry Hills,

Ayre Real Estate - Quarterly Results - Q1 2023