According to media reports, 2017 was the year the Sydney property market flattened.
That may be true of figures overall but it’s only a small part of the story. Instead, what we noticed were different trends affecting different areas, different styles of property and different price points.
We also saw some parts of the market stay surprisingly resilient – particularly at the top end where demand still far exceeds supply.
Breaking down the Eastern suburbs
Instead of seeing the Eastern Suburbs as one market, we prefer to break it down into four distinct areas, each of which attracts different buyers and is driven by slightly different dynamics. Each of these areas fared slightly differently over 2017:
The area from Watsons Bay to Rushcutters Bay takes in premium suburbs such as Bellevue Hill, Double Bay and Point Piper. High-end properties with harbour views are over-represented in this market. However, Double Bay and Bellevue Hill also house their fair share of older style units.
Here, we noticed:
- Downsizers looking for harbour views and often prepared to pay a premium to get them. Supply still can’t keep up with demand for these buyers, with only a limited number of properties available to meet their very specific criteria. You can read more about this phenomenon here.
- Expats returning to Australia and looking for a family home that’s close to good schools. These often took the place of international buyers in this part of the market.
- Less competition in the apartment market generally by the end of the year, although the top end of the market stayed very strong.
- No real slowdown at all in sales at the top end of the market.
- 11 Hampden Ave, Darling Point $7 million
From the established terraces of Paddington and Woollahra to the new performers in Randwick and Queens Park, this area has real appeal for families, as well as younger buyers.
Here we noticed:
- A Randwick renaissance with both homeowners and investors keen to capitalize on the new light rail line that opens in 2019. Due partly to this phenomenon, the average unit price in Randwick rose by 11.4% in the year to September 2017, according to CoreLogic.
- Serious interest in luxury Paddington and Woollahra terraces and freestanding homes that shows no sign of stopping. This accounted for many of our record-breaking sales in 2017.
- First and second home buyers displacing investors at the bottom end of the market.
Potts Point, Surry Hills and Darlinghurst continued to go from strength-to-strength. Once the domain of the young, these walkable suburbs are increasingly popular with the young-at-heart too.
Here we noticed:
- Downsizers entering the market in serious numbers and looking for a lock-up-and-leave-it lifestyle in the heart of the city. These buyers were responsible for many new suburb and area records.
- First-time buyers coming into the market to purchase a large number of one-bedder’s and studios. There are still well-priced properties in the inner-city and government restrictions on investor lending made first-home buyers better placed to capitalize on this.
- More families buying into the area: whereas people would once often leave the city once children arrived, people now stay, putting upward pressure on the price of family-sized homes.
- 5/1 Printers Lane, Darlinghurst $1.5 million
Suburbs close to the beach continue to attract a young demographic keen to live the quintessential sunburnt Sydney lifestyle. That said, this truly is a mixed area with property of all kinds.
Here we noticed:
- A growing number of families moving into the area and competing strongly for homes, especially those in the right school catchment areas.
- More luxury properties than ever before, including designer apartments and upmarket homes, although this still can’t keep pace with demand.
- A growing amount of first buyer action at the bottom end of the market, as in the inner-city.
- 21 Scott St, Bronte $3.5 million
Above $4 million: where the real action is
One noticeable trend that applied across the East in 2017 was that homes above $4 million performed exceptionally well.
We noticed two groups really contributing to this trend: upsizers who had sold their first family home and were looking to move into something grander, and downsizers who had recently sold their family home and were looking for a luxury and low maintenance lifestyle closer to the city.
Also contributing to the demand for properties in this price bracket was limited supply. There simply weren’t enough quality properties to go around. This led to some hotly contested auctions, as well as some great pre-auction results and off-market sales.
A changing market in overseas buyers
A key story at the height of Sydney’s property boom was the growing number of international buyers, particularly from China, who were allegedly driving up property prices. Given government curbs on non-resident buyers, it’s fair to say that Chinese buyers, in particular, were not the same force over 2017 that they were in 2016.
What we did see, however, was a lot of expat buyers looking to get into the Sydney property market – often with a view to renting their purchase out in the short-term and returning here at some stage down the track.
Traditionally, the summer period has been one of the strongest times of the year for expat buyers, as they often return to Sydney for the holidays. So we’ve been encouraging people looking to sell in the new year to consider getting their home ready for sale early. That way they can allow these buyers to see their homes by appointment, even if they don’t start a formal marketing campaign until February 2018.
Better balance between buyer and seller in the sub-$3 million market
By June 2017, competition started to wane for many homes in the sub-$3 million market and this was evident in the generally lower number of bids at auctions. This was especially true for properties that were in high supply – for instance, some new apartments. The decreased competition in this part of the market was also influenced by new restrictions on investor lending.
On the positive side, these restrictions meant that, by the end of the year, many buyers who had seen property prices run away from them earlier the year, began to re-enter the market – especially first home buyers.
We also noticed that quality properties still sold well, even if it took more skill on the part of their agents to get them the best price.
And finally: 2017 by the numbers
While the media headlines told us Sydney’s auction clearance rate fell to below 60% by November, they were still above 70% in the East – generally considered the marker of a seller’s market. While the number of bidders may have fallen, many of the auctions we held ended up achieving results well above vendors’ expectations.
In the year to date, the Ben Collier team has sold 45 houses and 11 apartments for a total of $255,507,500. Of this, $127,910,000 worth of property was sold off market. Off-market selling has really taken off, and we expect to see more of this in 2018.
Our average sale price was $4,531,553 and, while that may sound high, we serviced all parts of the Eastern Suburbs market. The highest sale price we achieved for a client was $13,500,000 and the lowest sale price was $375,000. The average number of days on the market was just 19.
All in all, 2017 was a fantastic year, and we couldn’t have done it without you.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.