For several years, Sydney has been one of the strongest property markets in the country. Each year has seen increases in median property prices across all Sydney suburbs. This has changed in the last year, with interest from both local and foreign investors dropping to levels lower than anything seen in the last decade.
This means that those looking to sell in the Sydney area may have some challenges ahead. However, it is a blessing for first-time home buyers and anyone looking to upgrade their home. High interest rates and property prices have locked middle-income earners in Sydney out of a number of suburbs, but in the current climate, a number of suburbs have recently become more affordable.
Part of the good news is that Sydney’s economy is performing well despite the reversal in trending property prices. Average national wages have increased by almost 3% over the last year, while Sydney home prices dropped by 3.5%. In essence, property in Sydney has now become a buyer’s market. Buyers can get a much better deal in properties due to lowered competition, while sellers are forced to lower expectations – and prices – in order to get ahead of the trend. Demand has fallen in a number of areas including Bankstown, Holroyd, Canterbury, Mortlake, and Homebush. Banks are now cutting cash rates significantly for first-time home buyers. Altogether, this means that this is one of the best times in over a decade to buy a home in Sydney.
One of the most dramatic results in this drop in property values is that several suburbs that were previously inaccessible for middle-income earners have now become affordable. The median price for units in Burwood Heights, Rydalmere, Dundas, Telopea, Pennant Hills, and Asquith have all dropped below $700,000. The same goes for units in Annandale, Jannali, Lilyfield, and Condell Park. Investors in these areas, seeing the current market trend, are dropping prices and rushing to sell, giving buyers bargaining power. This means that units in 39% of Sydney suburbs are now affordable for those earning an average income, compared to 35% in 2017.
As of yet, this trend applies primarily to apartments, as the affordability of homes has remained the same. In both 2017 and this year, 15% of homes across Sydney suburbs are affordable for those earning the average income. However, lowered interest rates and competition are still being seen across the board. This means that buyers will have more negotiating power and will be able to get better deals than some prospective first-time buyers have seen within their lifetime.
While this trend in pricing is expected to continue, Sydney home loans won’t remain low forever. Lowered interest rates might soon be restricted and the Financial Services Royal Commission is likely to place stricter conditions upon lending in the near future. What this means for those looking to buy is that the time is now. Get your foot in the door, and you can lock in an amazing deal.
At 1st Street, we are dedicated to helping you find the right home loan for you. We have offices in several states across Australia, and we have the knowledge and relationships to ensure you find the loan that fits your needs. If you’d like to speak with a home loan specialist about home loans, upgrading, or first-time home buying, feel free to contact us.