Sydney house prices have risen by almost $400,000 over the 2021 calendar year, producing the steepest annual increase on record.
Domain’s latest house price report showed that,
- Sydney house and unit prices are at new record-breaking highs — house price surpasses $1.6 million.
- Sydney house prices rose roughly $1,100 a day over 2021, a total rise of almost $400,000, to a new record of $1.6 million.
- This is the steepest annual rate of growth on record, at 33.1per cent.
- Sydney unit prices hit a new record high of $802,255 after gaining almost $62,000 over 2021, or 8.3 per cent.
- The rate of quarterly growth dropped by one-third compared to the prior quarter, at 0.9 per cent.
- Sydney house prices have risen roughly four times faster than Sydney units over the past year.
Commenting on the state of Sydney property prices, Dr. Nicola Powell, Domain Chief of Research and Economics explained,
Sydney House price growth gained slight momentum over the quarter, although the pace of growth remains comparatively lower than early 2021, providing further evidence that the peak rate of price growth is behind.
Sydney Unit prices have also lost steam, as quarterly and annual growth slows.
House prices have grown four times faster than units over the past year, a divergence that has created a record price gap with houses now double the price of a unit.
The rapid escalation in price is proving to be a significant financial barrier for entry buyers and upgraders against a backdrop of low wage growth.
This waning demand is playing out across a number of metrics; clearance rates have dipped from 81 per cent in the March quarter to 68 per cent in the December quarter and prospective buyer inquiries have dropped 20 per cent over the same period.
Housing affordability will continue to weigh on demand throughout 2022 – a topic that should become a key priority for the federal election.
Market conditions are shifting as more homes are being listed for sale than being purchased, nudging some power back to buyers
Dr. Powell said:
“Post-lockdown renewed seller confidence continued to buoy the volume of newly advertised homes for sale, soaring 27 per cent above the five-year average for the December quarter.
This catch-up played out across a record-breaking auction market with the highest volume of homes going under the hammer in a single quarter.
Sellers are being strategic with their market timing, listing homes for sale while selling conditions remain strong and the perception prices are at or close to a peak.
Some may also be timing a sale before interest rates rise or further macro-prudential measures are placed, which will take more wind out of demand.
This changing balance between supply and demand is slowly rippling across Sydney, sellers are having to be more realistic with pricing and cautious buyers are armed with more choice.”