Domain data reveals that in the first quarter of 2023, Sydney’s house prices rose by 1.3%, representing the first quarterly growth in a year and the most substantial gain since 2021. This growth is modest compared to the historical average quarterly growth of 2.8%, indicating a more moderate pace of price growth. House prices in the combined capitals also experienced growth for the first time in a year, driven by record migration, low listings, and tight rental markets. This development led ANZ and Westpac to revise their forecasts.
ANZ predicts house prices in Sydney and Perth to increase by 2% and 1% this year, respectively, with nationwide house prices expected to grow by 3%. Among the capital cities, only Adelaide is projected to decline by 1%. Brisbane is anticipated to drop by 2%, Hobart by 8%, Darwin by 4%, and Canberra by 5%. Despite the positive factors contributing to the housing market turnaround, price increases are likely to remain limited.
The premium housing market segments in areas like the eastern suburbs, city, and inner-south led the recovery, with prices rising by 6.9% and 7.4%, respectively. Growth is now spreading to other regions, and the reduction in sellers has been more significant than that of buyers, helping to stabilize and fuel price increases, according to Domain’s Chief of Research and Economics, Dr. Powell. However, a substantial price increase would require a catalyst, such as a rate cut.
Sydney-based selling agent, Thomas McGlynn reports that buyer demand has risen since December, with the average number of registered bidders increasing to five, similar to the levels seen during the pandemic upswing.
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