NSW MARKET OVERVIEW
NEW SOUTH WALES
NSW Market Overview with Alex Mirzaian Reflecting on Qrt 1 2023, what were some of the prevailing trends that you noticed and how did they play out in the market?
high, there may still be opportunities for developers to pursue projects that meet this need. Overall, while there are potential challenges in the NSW property market in the second half of 2023, it is important to consider the broader economic conditions, as well as demand and supply factors, to fully understand their potential impact. So, it’s important to keep an eye on the current state of the market and adjust accordingly. What market sectors do you anticipate being most in demand over the next six months? One potential area of demand is in the Build to Rent sector, more prominent in major cities such as Sydney and Melbourne. With people embracing Co-Living, shared accommodation, and boarding houses there may be increased demand for the variety of lifestyle living and alternative housing solutions, especially with the residential rental market booming. This demand could extend to Western Sydney locations that are within proximity to transport, universities and amenity. In addition, there may be continued demand for affordable housing options such as apartments and townhouses, particularly in areas that are well-connected to public transport and other amenities. Overall, the market sectors that may see the most demand over the next six months will likely depend on a variety of factors such as evolving buyer preferences, economic conditions, and housing supply levels. It is important to keep a close eye on these factors to identify potential opportunities and challenges in the market. Do you feel that associated factors like building costs, supply-chain challenges and market sentiment will improve for developers over the next 6-12 months? For instance, have building costs already peaked? Regarding building costs, it is difficult to say whether they have already peaked or will continue to rise in the future. In the current environment, the construction industry is facing several challenges, including supply chain disruptions, labor shortages, and rising material
One of the prevailing trends in the NSW property market over the past few years has been a decrease in housing affordability, particularly in Sydney. This trend was driven by a shortage of supply and increased demand from both domestic and foreign buyers. As a result, there has been a shift towards more affordable housing options such as apartments and townhouses, and a growing demand for properties in regional areas within commuting distance of major cities. This has also led to an increase in new developments and construction in these areas. Overall, while there have been challenges in the NSW property market, such as affordability and supply shortages, innovative solutions are emerging to meet the changing demands of buyers and promote Build to Rent developments. Marketwise, what are you forecasting in the second half of 2023 and how will increased lending costs impact the various markets? If lending costs were to increase in the second half of 2023, it could impact the property market in a few ways. Firstly, it may lead to a decrease in demand as some buyers may no longer be able to afford the higher mortgage repayments. This could lead to a slowdown in sales activity and a cooling of prices. However, it is worth noting that interest rate changes are not the only factor that impact the property market. Economic conditions, employment rates, and buyer confidence are also crucial. If these remain stable, the impact of higher lending costs may be minimal. In terms of property development in NSW, higher lending costs could impact developers’ profitability and their ability to secure financing for projects. This could lead to a slowdown in construction activity, which could exacerbate the already limited supply in certain areas. However, if demand for more affordable housing options remains
ALEX MIRZAIAN Director NSW Metro Investments CBRE
26 – June / July 2023
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