- Quarterly house price growth for Sydney was 8.5%
- SQM Research data shows a significant increase in weekly asking prices
- Units continue to underperform - increasing by only 2.2% during the quarter
In its quarterly property market movement report, Domain has revealed the median house price in Sydney has soared to $1.31 million.
This represents an increase of 8.5%, which Domain says is the fastest quarterly acceleration since they began collating such data for their Domain House Price Report back in 1993. Annualised, Sydney has experienced the steepest double-digit percentage growth since the previous peak in mid-2017 at 12.6%. Nowhere in Sydney has been immune from the price growth – all regions in Sydney have hit record-high house prices.
Data from SQM Research correlates with Domain’s; the weekly asking property price for all Sydney houses was around $1.4 million in March 2021, with the below graph showing that asking prices steeply increased during the quarter.
[Select part of the chart to zoom in on various years, and ‘reset zoom’ button to return]
Over the past 30 years, house prices in Sydney have twice increased by over 8% during a quarter with the first time occurring in June 2015. This makes the quarterly gain a rarity as this is the fastest rate of capital growth on record.
Although mainly driven by the upper end of the market, other fragments of the market are also recording strong growth making it difficult for various types of buyers.
While it’s true historically low mortgage rates have improved repayment affordability, saving a deposit is challenging for many due to rising house prices across the board combined with low wages growth and low interest on savings.
“Owner-occupiers have been the driving force behind Sydney’s swift price leap thanks to ultra-low home loan rates, government incentives and high household savings.
“Investors, who have been on the sidelines, have a renewed appetite and this could continue to support a recovery in unit prices.”
Domain House Price Report, March Quarter 2021
Units have underperformed relative to houses, although the Domain report suggests this too has improved.
During the March quarter, unit prices increased by 2.2% to $751,038 – only 0.2% than the March 2020 quarter. Arguably, this is due to buyers’ appetite for houses as opposed to other types of dwellings, and the fact that recent growth in Sydney property has been driven by owner-occupiers with investors only recently back on the scene.
While Domain predicts prices will still grow, it believes the current rate of quarterly growth will not continue.