City Beat November 2024: Sydney property market contracts for first time since January 2023, but off the plan demand continues to rise

After 21 months of gains, the Sydney housing market has finally recorded a drop in values.

CoreLogic's Monthly Index showed home values, both units and apartments, declined in October, the first time since January 2023.

While units have been outperforming houses in recent months, October is the first time both were in the red.

Sydney's last decline saw the market contract -12.4 per cent between February 2022 and January 2023.

Weaker conditions have been led by the most expensive areas of the market, with a -0.6 per cent fall in upper quartile house values over the month and a -1.1 per cent drop over the past three months.

In comparison, Sydney’s lower quartile house and unit values both recorded a half a percent rise in values in
October.

CoreLogic Research Director Tim Lawless notes that the stronger performance across the more affordable end of the market is a consistent theme across the capital cities.

“A combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers in the market is the most likely explanation for stronger conditions across the lower value cohorts of the market.

“The past three months has seen the lowest quartile either record a higher growth rate or smaller decline relative to the upper quartile or broad middle of the market across every capital city except Canberra.”

What happened in the Sydney off the plan apartment market in October?

While the established market continued to grapple with affordability challenges and an increase in supply, it wasn't the case in the off the plan apartment space.

October saw several developers quickly able to move forward on delivering their projects given successful starts to their sales campaign.

There are no projects more successful than those in the booming Northern Beaches Metro corridor at the moment.

TWT Property Group held what they called a "Ground Building Ceremony" in October at the recently launched first stage of their Crows Nest masterplanned precinct, The Collective.

The Ground Building Ceremony signalled the completion of the basement concrete pour and commencement of vertical construction.

Over $30 million worth of sales were secured at the first release of apartments, with the majority of purchasers coming from the local area.

Belle Property International's Murray Wood said younger couples and downsizer owner-occupiers were among the first buyers in the building of 93 apartments.

"The enthusiasm we’ve seen on day one confirms that there’s a real appetite for boutique-style residences in this area," Wood said.

"Buyers are very keen to secure a foothold in Crows Nest, especially given the new Metro station's convenience. The market is showing resilience, and these sales reflect strong confidence in premium, well-connected developments like The Collective."

Construction of the building is moving ahead of schedule. It is slated for completion in late 2026.

There has been an equally strong resposne to Elevate Hume Place, the over-station development above the new Crows Nest Metro.

The joint venture between Third.i and Phoenix Property Investors saw over 6000 people enquire on the 130 one, two and three-bedroom apartments in a building designed by the internationally acclaimed architecture firm Woods Bagot.

The apartments are split into three categories; The Urban Residences, Panoramic Residences, and Skyhomes.

The Urban Residences are made up of 76 one and two-bedroom apartments. They start on level seven and each feature a balcony or winter garden providing an extended alfresco living space. 

The Panoramic Residences offer one, two and three-bedroom apartments, higher up the building to offer extensive views stretching from the heads, across the Harbour, and to the city skyline. 

There are only 11 apartments in the Skyhomes collection, including a number of three-level penthouses that have their own rooftop terrace with a pool and outdoor kitchen. Each of the Skyhomes has three bedrooms, except for one oversized two-bed.

Third.i is offering prospective buyers to buy an apartment at Elevate Hume Place with just a $10k deposit.

Set to ride the wave of demand in the area is Sterling, the first new development launched in Lane Cove for several years.

Sterling, located in the quiet northern end of Lane Cove, comprises features 50 one, two, and three-bedroom apartments, catering for a wide variety of buyers and just six apartments per floor.

Ray White Projects Wider Sydney Managing Director, Mark Bernberg, says everything about the project is intrinsically tied to what sterling is all about.

"Everything has been considered to be of sterling quality," Bernberg says.

"The fixtures and finishes are another level up from what has come before in this quiet pocket of Lane Cove, and every apartment, be it for the first home buyer, rightsizer, or downsizer, has the same sterling design approach."

As part of its commitment to delivering quality, Scion has taken out the 10-year Latent Defects Insurance offered by Resilience Insurance. The insurance, often known as LDI covers structural defects of the building for up to 10 years post-completion. Sterling is the only development in Lane Cove to have the insurance.

Scion Group is well advanced in construction of Sterling. The building itself is expected to complete later this year, with the internal fitout seeing residents move in some time in Q1 2025.

In October, three of Sydney's biggest developers reveal plans that will contribute nearly 1,000 dwellings to the undersupplied Sydney apartment market, filing for  apartment supply across Sydney  is more supply coming from Sydney's biggest developers.

Meriton submitted plans for two towers in Zetland, Level 33 proposed a $500 development in Wollongong, and ALAND took over the Parramatta site from collapsed developer Top Place.