Sydney property prices continue to go from strength to strength with new data showing the median home price is now sitting at $1.107 million.
Despite higher interest rates, property prices in Sydney surged 6.39% in the past 12 months even against a backdrop of stretched affordability according to PropTrack. Regional New South Wales also saw home prices hit a record $729,000 with prices 4.47% higher than 12 months ago.
PropTrack economist Eleanor Creagh said that even though Sydney is the most unaffordable market in Australia, we’re still seeing home prices continuing to lift and hit fresh peaks.
“It’s likely that the continuous lift in home prices in Sydney is probably motivating many to simply overcome those affordability challenges and transact, given that there is an expectation of continued home price growth,” Ms Creagh said.
“So many may be moving ahead with their purchasing plans sooner than otherwise”.
“Mortgage servicing costs have surged, borrowing capacities have reduced significantly and household income growth hasn’t kept up with those increases, so we’re continuing to see a deterioration in affordability.”
According to PropTrack, Sydney home prices grew for the 19th consecutive month in June.
Sydney has also witnessed a steady increase in the number of homes heading to market this year – which has been met by constant demand. However, the pace of growth began to ease since the end of the summer selling season, with more options for buyers to choose from.
Ms Creagh said a lot of existing homeowners in Sydney are likely to be sitting on sizeable equity gains, which is insulating them to a degree from the higher interest rate environment if they’re looking to upgrade.
Since March 2020, prices across Sydney are up 37.8% and 53.7% in regional NSW. Property prices are up across the board, led by Inner South West Sydney up 9.71% to $1.189 million.
South West Sydney has seen prices rise 9.59% to $1.041 million, Parramatta increased 8.94% to $972,000, Inner West Sydney is up 8.11% to $1.323 million. While Richmond-Tweed is up 7.74% to $857,000 as the only regional location to make the top 5 for the past 12 months.
“National home prices have cycled through 18 consecutive months of growth despite interest rates remaining at this high level and have gone on to hit another fresh price peak in June,” Ms Creagh said.
“It’s certainly no mean feat given it’s been during the most substantial interest rate tightening cycle in a generation.
“And yet we’ve still seen that in many markets home prices have largely recovered the price falls that we saw when interest rates were first rising in 2022 and have gone on to continuously hit fresh peaks.”
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