THE PROPERTY DEVELOPMENT REVIEW
NSW MARKET OVERVIEW
NEW SOUTH WALES
NSW Market Overview with Craig Pontey Buyers sentiment is great coming into spring. We have not seen the large volumes of homes that normally would the market this time of year come on. So there is not as much for buyers to choose from, this is holding prices. Sellers are also taking advantage of this and quite a bit of upgrading has been going on. The top end of the market $20Million plus is the strongest I have ever seen it in my 45 years in the business. I cannot count on both hands and feet the number of local buyers that are looking in this range. The offshore interest has just started to ramp up recently as well. The interest rate hikes are starting to hurt a bit with vendors getting rid of their investment properties. With rates at 6% plus to borrow money the current rental returns are only at 2.5-3%. Some vendors are selling which is putting pressure on rental stock levels. Good family homes are still very keenly sought. The archetypical 4 bedroom, 3 bathroom, double garage and pool are selling strongly. Developers are still out hunting opportunities. The issues they face are extra funding costs, council planning delays and the increases in building costs. We have noticed a 25% increase in building costs in the past 12 months. Buyer demand off the plan has also cooled. There is still good interest in large apartments with views in good location. Off the plan purchasers are looking for 200sqm plus, 3 beds, 3 baths, 2 cars. Sales at the top end at $50,000sqm plus levels have been quite strong. We believe that the current market is holding up remarkably well. There are still some headwinds ahead in 2024. The current increases in rates have not really been felt yet… Good property will always bring great prices, property a bit of the pace maybe harder to sell in 2024. The investment market is a bit of a concern as we believe there could be an “investor exodus” from the market. We have already noticed investors selling redundant holdings to cash up and get a better return from cash in the bank. All in all we believe 2024 is going to be a challenging year ahead.
CRAIG PONTEY Managing Principal McGrath Double Bay
September / October 2023 – 29
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