Price growth re-accelerated in May

May produced another stunning run of results for the local property market as price growth re-accelerated by 2.3%, which was nearly 1% higher than experienced through a slightly patchy April. We detected an increasing conversation through the market that the ‘frenzy’ was starting to dissipate, with fewer buyers attending open homes and registered bidders at auctions. While there was evidence to support this change, we continued to see property values rise and reach new heights across every type and style of property.

One of the strongest results we’ve achieved through this bull-run market occurred on the final weekend of May with the sale of 25 Burnell Street, Russell Lea by Daniel Patterson and Alex Trovato. The property attracted strong interest as it was one of the last remaining knockdown and rebuild opportunities left on this particular street. The guide was $5.75m, which was quite bullish based against previous sales, however the auction drew in nine registered bidders and delivered a simply breathtaking result of $9m. This sale smashed all sorts of suburb records and amazingly the buyer intends to spend $4m building a new home on the site.

Such results have left many asking just how long property prices can continue to rise like this. It’s such a difficult question to answer. Just as we start to see some evidence that selling conditions may be moderating, we then have a weekend of ground-breaking prices and properties selling $1m or more over sale guides. We know that longer-term interest rates are starting to lift and loan applications and approvals are declining, which should slowly bring the market back to a more balanced trading platform. Yet as it stands we’re still seeing elevated levels of emotion from the buyer pool and this is translating into the strongest sale prices our market and Sydney has ever seen.

We continue to read that the major banks are forecasting up to 20% price growth until the end of 2022 but we’ve easily seen 25%-30% growth in our market since October. Domain data shows that the rate of growth for prestige property has been double the rest of the market, while the volume of buyers willing to spend $5m-$15m on local property has never been higher. We’ve also seen substantial growth occurring with homes that would have fetched $3.5m in October but would now achieve $4.5m or more.  

As we move into the first month of winter it’s likely we’ll see fewer properties come to market, which may possibly contribute to increasing buyer intensity to secure a property. We’ll no doubt look back at this period as an astonishing time for Sydney property. We recall the boom of 2003 that had a similar impact however this cycle is the pinnacle of property growth.

Posted in Uncategorized on 1st June, 2021