Where To Buy Property in Sydney – June 2016?

Do you ever wonder where you should be buying property in Sydney?

As a buyers agent specialising in Sydney, Melbourne and Brisbane, we have seen some key trends emerge over the last month which are inline with HTW’s latest market update. This article will focus on the Sydney property market and what each region is currently experiencing.

Western Sydney

Over the past year prices for units in Western Sydney have increased by upwards of 6% for units and almost 10% for houses.

Stock on Market

According to SQM figures, stock on market levels are above the previous year at this time.

Asking Sale Price

Typically when prices rise rental yields decline. This is definitely the case in Western Sydney. Over the previous 3 years prices for houses and units have incased by around 35% or nearing 12% per annum.

Gross Rental Yield

Rental yields for houses and units have trended downwards over the previous year. Since 2009 rental yields have gradually reduced from highs around 5% to current rates around 4%.

Vacancy Rates

Currently vacancy rates are at 2% which is just above last years levels. The long-term trend since 2010 has seen small yearly increases from lows of 1%.

Upper North Shore

Prices for houses and units in the last year for the Upper North Shore have increased by upwards of 14% for units and almost 11% for houses.

Stock on Market

According to SQM figures, stock on market levels are below levels from 2015. Unit levels have increased slightly.

Asking Sale Price

Over the previous 3 years prices for houses have increased by 29% and 27% for units. Currently median house prices are over $1.4m and $783k for units.

Gross Rental Yield

Rental yields for houses and units have declined over the previous few years from highs of 5% to current levels around 3%-4%.

Vacancy Rates

Vacancy rates in the Upper North Shore are at 2%. These have been fairly stable over previous years.

Lower North Shore

Over the last year prices for units and houses in the Lower North Shore have increased by upwards of 10%.

Stock on Market

Stock on market levels in the Lower North Shore are currently at historical lows.

Asking Sale Price

Median house prices are currently above $1.9m for 3 bedroom houses and over $940k for units.

Gross Rental Yield

Rental yields for units and house have been relatively volatile in the Lower North Shore ranging from highs of 6% to current lows around 3%.

Vacancy Rates

Lower North Shore vacancy rates are currently at 2.4%. The region has been constant over the last few years.

Eastern Suburbs

House prices have increase by over 18% in the past year in the Eastern Suburbs and over 10% for units.

Stock on Market

Just like the Lower North Shore, the Eastern Suburbs is experiencing historically low levels of new stock to the market. Meaning limited available stock to buy, resulting in stable and growing prices.

Asking Sale Price

Median house prices are currently above $2m and over $830k for units. 3 year growth for houses has surpassed 44% and over 27% for units.

Gross Rental Yield

The Eastern Suburbs rental yields have trended to current levels between 3%-4% from highs of 5% in 2011.

Vacancy Rates

Vacancy rates are below Sydney’s average at 1.5%. This means properties either being rented quicker in the Eastern Suburbs than surrounding regions. It could also mean there are less available properties for rent as a proportion of the stock in the region.

Inner West

Inner West house prices increased by almost 12% in the last year, compared to just over 2% for units.

Stock on Market

Like many other regions in Sydney, the Inner West region is currently experiencing low levels of available property stock. Units have increased over the last year, whilst houses have been scarcer.

Asking Sale Price

Asking prices for houses in the Inner West increased by 31% over the last 3 years compared to 24% for units.

Gross Rental Yield

Gross rental yields are ranging between 3%-4% in the Inner West. This is below highs experienced in 2011 between 4%-5%. This follows the Sydney wide trend of deceasing yields whilst prices increased.

Vacancy Rates

Vacancy rates are at 1.4% which is below Sydney’s average, making the Inner West an region with limited available rental stock as a proportion of it’s total property stock. This trend has been relatively stable over the previous few years.

Northern Beaches

Northern Beaches house prices increased by over 2% in the last year and unit prices rose by over 10%.

Stock on Market

According to SQM figures, stock on market levels are above the previous year at this time.

Asking Sale Price

Currently house prices sit above $1.56m in the Northern Beaches and over $709k. The last 3 years have seen units increase by 22% and houses by just under 19%. This goes against the trend in Sydney as units have increased more than houses.

Gross Rental Yield

Northern Beaches rental yields are between 3.5%-4.5%. These are some of the highest in the Sydney region. Highs reached above 5% in 2012. The last year has seen a gradual decrease in unit yields, which may explain greater than expected price rises.

Vacancy Rates

The current vacancy rates in the Northern Beaches are at 1.4%. This is just below the 10 year trend in the region.

Parramatta

Asking sale prices for Parramatta houses grew by over 7% in the past year and over 3% for units in the past year.

Stock on Market

Current stock on market figures are marginally above last years levels in Parramatta.

Asking Sale Price

Median house prices in Parramatta are over $910k and over $596k for units. Parramatta has experienced over 45% growth in houses and over 30% unit price growth over the last 3 years.

Gross Rental Yield

Current rental yields range between 3%-4% in Parramatta which is in line with many other Sydney regions. Rental yield highs in 2009 were above 4.5%-5.5%.

Vacancy Rates

Parramatta vacancy rates are at 1.8% which is just above Sydney’s average of 1.7%.

Conclusion

The Sydney property market has hit back over the previous month with 3.1% growth and quarterly growth of 6.6%. This takes yearly growth to 13.1% and total gross returns to 16.9%. Reasons for this renewed price growth could be because of:

  1. Historically low interest rates – many lenders are offering rates below 4%
  2. Stable economic conditions – particularly in many affluent Sydney regions have resulted in limited available stock and subsequent price stability and growth
  3. Population growth – during 2014/2015 Sydney’s population grew by 1.7% or over 83,000 people

The trends we have seen should continue in the Sydney property market over 2016, particularly once the election has occurred.

Currently each region within Sydney has it’s own positives and negatives. Some are priced at comparatively high levels due to the strong underlying demographics. Other regions are more affordable, but are further out from the Sydney CBD.

When it comes to buying property in Sydney a buyers agent can really help you understand which region and specific suburb will be right for your personal requirements.