With values flattening in September and falling in October and November by 0.2%, it looks like Sydney’s housing cycle has turned. The two consecutive months of decline follow a 16% rise in values since the cycle commenced in February last year.
City houses are driving the weaker outcome with values down 0.8% over the past three months compared with a 0.4% rise in unit values over the same period.
Sydney house prices graph
Similarly, the upper quartile of the market is leading the weaker conditions, with values falling 1.6% over the past three months while lower quartile values are showing a subtle rise, up 0.9%.
Sydney house prices – what happened in 2023
The pace of value gains across Sydney was leading the nation in early 2023, but conditions began easing after a cyclical peak rate of growth in May when home values were rising at a monthly pace of 2%.
A sharp slowdown came amid rising interest rates, tightened lending, and worsening affordability at a time when advertised stock was above average.
But while Sydney’s property prices dropped from their peak early on in 2023, the market stabilised and even partly recovered by the end of the year, pointing towards an outlook with a more sustainable rate of growth in home values leading into the new year.
Source: SQM Research
Overall, the Sydney property market saw home values defy predictions in 2023 – prices are now up 11.6% since the January 2023 trough.
Greater Sydney’s median dwelling price climbed to $1.12 million over the year with more than 90% of suburbs increasing in value.
Domain data shows that the Sydney suburbs of Bungarribee, Quakers Hill, and Kings Park were among 36 Sydney suburbs where median house values surpassed the $1 million mark over the 12 months to October 2023, with each of their median house prices rising by more than 15% year-on-year.
More than 70% (or 401 of the 556 analysed) of Sydney suburbs now have a median house price that is higher than $1 million, up from about 65% the year before.
And unit prices in almost a third of 302 suburbs analysed hit seven figures, up from a quarter a year ago – Brookvale, Castle Hill, St Peters, and Zetland were among 18 suburbs where the median passed $1 million.
Meanwhile, a string of inner and middle ring areas joined the ranks of the $2 million plus club, which jumped to almost 170 suburbs, up from 140 in 2022.
Sydney’s strong pace of annual growth is remarkable in the face of the substantial deterioration in affordability that occurred with the sharp rise in interest rates.
It is also a testament to the strong demand aided by the pick-up in population growth, and limited supply that offset the effects of higher rates throughout 2023.
Sydney house prices – the longer-term data
CoreLogic’s data shows how Sydney house prices have rapidly risen and dropped since 2019.
The Sydney property market upswing in 2021 was one of the strongest property price growth periods in Australia’s history.
And it was followed by an equally historic drop in prices in the 12 months that followed.
Over the past 30 years, Sydney dwelling values have increased by 449% (5.8% per annum), with the 10 years ending July 2022 recording the highest rate of growth over the past three decades.
The 30-year growth rate was the second highest of any capital city, after Melbourne (459%).
In dollar terms, Sydney’s median house value has increased from approximately $221,770 in July 1992 to $1,346,190 in July 2022; an increase of approximately $1,124,420.
Unit values are approximately $623,080 higher over the past 30 years, rising from $183,230 in 1992 to $806,310.
