2016 turned out to be solid year for residential real estate in the Inner West and Sydney as a whole.
A combination of low interest rates, a shortage of homes, and strong buyer demand continued to add fuel to an already heated market.
Affordability, or rather, its lack of, was the topic on everyone’s lips.
CoreLogic RP Data figures show the average dwelling price in Sydney rose 16 per cent to $850,000 in the 12 months to December.
Driving the strong price growth was the shortage of properties for sale, with Sydney’s listings down 10.1 per cent between December 2015 and December 2016.
Sellers were clearly the winners as they benefitted from the intense competition from buyers willing to pay a premium to secure a property.
Auctions were the favoured selling method and resulted in homes being snapped up for prices well above expectations.
The Inner West was a standout performer with clearance rates consistently in the 80-90 per cent vicinity.
A contributing factor behind the strong market activity was the low interest rates.
In 2016, the Reserve Bank of Australia made the decision to cut the cash rate twice, taking the official rate to 1.5% by December.
It will be interesting to see what lies in store for the inner west market in 2017.
In regards to interest rates, there is speculation that they have bottomed out and that the Reserve Bank of Australia may increase the cash rate at some point this year.
However, even if the cash rate were to rise, they will still be sitting at record low levels, which is good news for anyone looking to buy a home.
There is also talk that there may be an oversupply of apartments in Sydney due to the amount of construction taking place across the city, and thus, prices could drop.
However, we do not believe the inner west will be affected greatly as it is an area that is highly sought after by buyers.
Investors and owner-occupiers are attracted to the region’s great lifestyle features, transport links and proximity to the city, and as long as demand remains, apartments will continue to be snapped up.
If you are thinking about getting into the property market this year, our advice is not to wait.
Anyone with a sufficient deposit or the ability to get financial assistance from family should make a move now.
If you’re thinking about selling, the lack of listings and the strong demand from buyers provides the ideal conditions for putting your home up for sale.
At Urbane, we are here to help buyers and sellers achieve their property goals, so speak to us today to see how we can assist you.