Sellers of quality family homes are best placed as the Sydney property market returns for another year,with more than 1500 homes already scheduled to go under the hammer this month – and thousands more to be listed for sale.
Sydney’s four-bedroom median house price fell 3.3 per cent last year. House prices more broadly fell more than 10 per cent.Peter Rae
The median price for four-bedroom houses in Sydney fell 3.3 per cent last year to $1.35 million,while three-bedroom houses dropped 5.7 per cent and two-bedroom houses dropped 10.5 per cent,Domain data shows.
Sydney’s stratified median house price fell 10.9 per cent by comparison,while the unit median fell 6.5 per cent.
Smaller apartments also recorded larger declines,although the picture was mixed. The one-bedroom median dropped 8.1 per cent to $620,500,while two-bedroom units fell 6.8 per cent and three-bedroom apartments declined 7.7 per cent.
Domain’s chief of research and economics Dr Nicola Powell said larger homes had held their value better,as buyers continued to put a premium on space.
“The way in which we’ve used our homes has changed as a result of remote working and hybrid working,so an element of that is still coming out,” she said. “People are also taking the opportunity of the downturn to upsize ... as you can find that[gap between property types] has narrowed.”
Four-bedroom houses were also more common in middle and outer-ring suburbs,where demand was holding stronger,Powell said. Smaller two-bedroom and three-bedroom houses were typically found in more expensive markets closer to the city,which had been harder hit as the upper end of the market led the downturn.
Some buyers may have been priced out of the two-bedroom house market and pushed to units,because of reduced borrowing capacity,Powell added,while others may think larger apartments offered better value.
Larger homes even recorded a rebound in prices last quarter,up 3.8 per cent for four-bedroom houses and 4.3 per cent for three-bedroom units. However,Powell expected further house price falls,though at a slower rate,as reduced borrowing power and the rising cost of living continued to weigh on budgets.
AMP Capital chief economist Dr Shane Oliver still forecasts Sydney’s house prices to drop 20 per cent from peak to trough,based on expectations that the cash rate will peak at 3.35 per cent.
Further price declines would be likely if the cash rate was to climb above 4 per cent,. But Oliver said that was unlikely,especially as that would push mortgage rates close to 8 per cent – increasing repayments on a $500,000 loan by $15,000 a year.
“People just don’t have $15,000 a year to put into the mortgage,” Oliver said. “It would cause significant mortgage stress,and we’ll see distressed selling if that happens.”
The fact that family homes are holding up better amid the downturn is welcome news for Haberfield vendor Francesca Trochei,who is selling her family’s four-bedroom Federation home. The home was purchased by her late parents in the 1960s,and has only changed hands twice since it was built.
Francesca Trochei is selling her family’s beloved four-bedroom home in Haberfield.Louise Kennerley
She had some trepidation about selling in a cooler market,but was hopeful the home will prove popular with upsizing families.
“Two of my[son-in-law’s] mates have bought in Haberfield recently,there’s the space,it’s got character,and the land sizes ... they can see enormous potential.”
She understood why prices would hold up better for family homes. “I think they always will because that’s the nucleus of a family and a happy home,” she said. “I know someone will love the house like my family loved it.”
Her agent Michael Tringali of McGrath Leichhardt said there had been good enquiry on family homes in the area.
“There’s always a shortage of good Federation homes and large family homes in Haberfield because they are so tightly held,and that shortage creates strong demand.”
Such homes were drawing interest from local and out-of-area families seeking better value for money than they could get in suburbs like Annandale and Balmain,and proximity to private schools.
While prices have softened,some quality homes were receiving higher offers than last year,Tringali said.
Sales agent Michael Gallina of Belle Property Hunters Hill said limited supply and ongoing demand from upsizing families,and those seeking multi-generational homes,had supported prices for four-bedroom homes in the Gladesville and Ryde region.
“Most of our buyer demographic are upsizing from the inner-city or inner west market[which they’ve been priced out of] and they’re looking for more space to work from home and raise their family,” he said.
He expects an increase in homes for sale in the coming months,as the market ramps up and more empty nesters look to downsize,but believes there is enough demand to support the increase.