After 18 months of record-breaking growth, we’re now seeing headlines saying that Sydney’s property prices have hit their peak.

But is it true? And how can you tell?

What’s happening in the Sydney property market now?

The tempo of Sydney’s property market has undeniably changed. After 18 months of runaway price growth, balanced conditions have returned.

But it’s not just here in Sydney. Analysis published in the Australian Financial Review shows that prices in some inner and middle-ring suburbs in Australia’s capital cities might have peaked as early as September last year, with prices declining consistently since then. The data shows that almost one in three Australian housing markets experienced softer selling prices in the three months to February, with nearly 40% of suburbs within 40km of a central business district seeing price growth slow.

Meanwhile, CoreLogic reports that Sydney-wide housing values declined by 0.2% in April, following similarly modest decreases in February and March. This represents the first quarter of negative price growth for Sydney since the lockdowns of 2020. At the same time, the number of homes advertised for sale has normalised. Sydney’s advertised housing stock levels are now more or less in line with the previous five-year average after a prolonged listings drought that fuelled fierce competition amongst buyers in 2021.

Why has the market changed now?

The record-breaking growth we saw in 2021 was simply unsustainable. It could never last long term – and few would want it to. The reasons why the market has now softened include:

  • More listings. Many vendors held off listing their property for sale amidst the uncertainty of COVID lockdowns. With restrictions lifted, there’s been an above-average flow of new properties coming onto the market, which has reduced competition between buyers.
  • Uncertainty about interest rates and the war in Ukraine. The possibility of interest rate rises was a hot topic for months before the Reserve Bank raised the official cash rate in early May. Uncertainty around interest rates, and the ongoing war in Ukraine, have seen some buyers holding off on purchasing property.

Some buyers might also be awaiting the results of the federal election before making their next property move.

So, does this mean property prices have peaked?

Sydney is a diverse market, and while sales prices in some areas have been softening for several months, indicating they have already hit their peaks, others continue to hold steady or even grow. Killara, for example, has maintained a median house price of $4.2 million since November 2021, following an almost 70% price rise since 2019.

Meanwhile, the latest figures from realestate.com.au show that prices in some Upper North Shore suburbs continue to climb. West Pymble’s median house price hit a 12-month high of $2,607,500 in March, while median prices in Hornsby also continued rising to reach $1,743,000. It’s clear that property in blue-chip areas like the Upper North Shore and Ku-ring-gai is still very much in demand from buyers.

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What does it mean for Upper North Shore buyers and sellers?

Buyers will undoubtedly be relieved to see the end of the ferocious price growth of 2021, especially first home buyers who don’t yet own property and haven’t benefited from an increase in equity. Waiting for further market changes, however, might not pay off – in an unpredictable market like this one, buyers are encouraged to find the right property for them and make their move when the opportunity arises.

Sellers, meanwhile, needn’t despair. As we’ve seen, many parts of Ku-ring-gai and the Upper North Shore are still seeing prices hold steady, or even grow, albeit at a slower rate than last year. Even if local property price growth does slow down, the capital gains of recent years have been so substantial that homeowners are still very much ahead.

While hindsight is a wonderful thing, even with all the research and data in the world, it’s impossible to ‘pick the market’ for the best time to sell or buy. With so many factors influencing the market’s fluctuations, the best thing buyers and sellers can do is make their next property move at a time that’s right for them.

It can help to view property as a long-term investment. Historically, Australian property has grown in value over time, and although there are never any guarantees, there’s also no reason to expect this long-term pattern won’t continue, which is certainly what we’re expecting on the Upper North Shore.

If you’re thinking about buying or selling on the Upper North Shore or in Ku-ring-gai, we can help. Get in touch with our team today.

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