What happened to Sydney apartment values over July?
Sydney apartment values rose a further 1.6 per cent, according to property data firm CoreLogic.
Values have now grown 10 per cent over 2021, with 1.6 per cent over June and 1.8 per cent over May, a rolling quarterly gain of 5.1 per cent.
Sydney's median apartment value is now $810,000, having started the year at $734,000.
The gains in the apartment market come as the booming housing market lost a little bit of steam over July. Sydney has recorded the sharpest reduction, with the monthly capital gain falling from 3.7% in March to 2.0% in July.
CoreLogic's research director, Tim Lawless, suggests one of the reasons house prices are starting to lose a bit of steam is that they are becoming unaffordable for many.
“Sydney is the most expensive capital city by some margin and it has also been the city where values have risen the most over the first seven months of the year. Worsening affordability is likely a key contributing factor in the slowdown here, along with the negative impact on consumer sentiment as the city moves through an extended lockdown period," Lawless says.
"Along with declining home affordability, much of the earlier COVID related fiscal support (particularly fiscal support related to housing) has expired."
Recently there has been some volatility in new inventory levels, with the number of newly advertised properties falling sharply across Sydney and Melbourne amidst lockdowns.
In Sydney, the monthly number of new listings added to the market has fallen by approximately -30% since the week ending June 27th, dragging total active listing numbers -13.7% below the five-year average.
“At the other end of the spectrum are the apartment sectors of Melbourne and Sydney, where rental conditions have been substantially looser."
"The good news for landlords is that rental markets in these areas are stabilising following a substantial reduction in rents due to high vacancy rates attributable to stalled overseas migration and a preference shift away from high density living during the pandemic,” Mr Lawless continued.
We have seen the same trend through earlier lockdowns, where both buyer activity and vendor activity reduce before recovering to pre-lockdown levels once restrictions are eased or lifted.
“With stock levels remaining tight, selling conditions have been skewed towards vendors."
"Auction clearance rates have remained in the low-to-mid 70% range across the major auction markets through July and private treaty sales continue to record rapid selling times and low discounting rates,” Lawless said.
