City Beat April 2024: Sydney unit growth continues to outstrip houses in 2024
The Sydney unit market continued to outperform house market growth in 2024, property data analytics firm CoreLogic found.
CoreLogic’s Monthly Hedonic Index showed the median value of units, which incorporates both townhouses and apartments, rose by 0.4 per cent in March to be one per cent up over 2024. Comparatively, house values rose 0.3 per cent in March to be 0.9 per cent up so far this year.
Sydney's median unit value is now at $839,000, compared to the median house value of $1,414,000.
March marked the 14th straight month of the house market upswing. Since declining -7.5 per cent between April 2022 and January 2023, the national home value index has increased 10.2 per cent, or, in dollar terms, by around $71,832, rising to new record highs each month since November last year.
What happened in Sydney's off the plan apartment market in March?
Sydney's off the plan apartment market could see an increased demand in 2024 as Sydneysiders grapple with the cost of living in the most expensive capital in the country, Charter Keck Cramer forecast.
The property advisory giant's Metro Sydney State of the Market H2 2023 said there is considered an enhanced opportunity for apartment projects to receive increased demand in the Harbour capital, given that buy-to-sell apartments represent the most affordable dwelling typology. They note however there needs to be an expectation recalibration due to budget constraints.
CKC believes the “cascade" effect will continue to play out in 2024. "The “cascade” effect can be described as the trade-off/s made by occupiers in terms of the type of housing, number of bedrooms, location, type of tenure and number of people per household," the report read, adding that the trade-offs are primarily driven by buy or rent price points and availability of stock."
However, while the "cascade" effect may influence some buyers to prioritise affordability, there is still a significant market segment interested in apartments at the higher end of the market. Revelling in the demand is Aqualand's AURA by Aqualand and First Quadrant Properties recently launched Willoughby Grounds.
Aqualand recorded over $100 million in sales in February at the North Sydney apartment development, set to be completed later this year. It was their biggest sales month to date, not including the month the project was launched in.
Aqualand’s Head of Sales and Marketing, Alex Adams, said the figure represented the biggest jump in sales activity on any project he’d experienced.
“We’ve found potential buyers who had previously enquired, but weren’t quite ready to commit, have recently returned to the market. Those waiting to transact closer to the building’s completion have now seen its construction progress and have made the decision to buy,” Adams said.
Families continue to be the lead clientele, while the stabilising interest rates, and the ability to now see the product at the new display apartments, are also attracting more investors, who are showing more interest in their searches.
Recently, downsizers have also come back, with more four-bedroom sales at around $7 million.
“With the housing market stabilising, and even increasing, they now have confidence in selling their home. Also, with the interest rates steadying they can list their homes until they get the price they want."
Read more: AURA by Aqualand secures record $100 million in sales in February
It's been a similar story at Willoughby Grounds on the Lower North Shore, where buyers have snapped up the largest apartments of all, which saw apartments amalgamated in the plans to create more of the larger scale homes.
LINK Project Marketing Director Ben Hamblett says they've created something that fits a major gap in the market.
"Four-bedroom apartments don't exist in Willoughby, even in some of the other new developments. However there is a strong underlying demand for them," Hamblett says, adding that the only opportunity to buy four bedrooms is in the housing market, and that can cost upwards of $4 million.
Indeed since the launch of the project, which will be delivered in five stages housing a total of 160 apartments, reflective of the number of buildings there are in the mini-masterplan, over 20 per cent of the enquiry on Urban have been on the four-bedroom configurations, with a further 20 per cent on the large, 200 sqm three-bed apartments on offer.
There's also been great success at Podia's new luxury Neutral Bay apartment development, Wirra, where the penthouse sold for $13 million.
The size of the apartment, at 200 sqm, and the location of Wirra, on Ben Boyd Road next to Neutral Bay Village, were the two contributing factors for the local downsizing couple. The apartment has three bedrooms, four bathrooms, and parking for three cars.
Read more: $13 million Wirra penthouse sets Neutral Bay off the plan apartment record
Luxury apartment developer Central Element filed plans for their $50 million Bondi Beach site in March. They're planning seven luxury residences on the amalgamated 2,050 sqm site fronting Sandridge and Wilga streets.
At the top of the site fronting Sandridge Street, there will be two duplex-style homes above a turntable parking system which will offer each residence two parking spaces.
Read more: First look exclusive: Central Element's ultra-luxe Bondi Beach plans revealed
Sydney builder developer Coronation Property Group has also kicked off construction on the second stage of their Ashbury Terraces residential project in Sydney's inner west.
Ashbury Terraces, designed by acclaimed architects SJB, will be a combination of 127 apartments and townhouses on a sprawling 16,500 sqm site on Milton Street in Ashbury, complemented by a range of communal amenities, green spaces and landscaping by Daniel Baffsky of 360 Degrees.
Prominent Lower North Shore apartment developer Abadeen Group appointed iCIRT-rated Decode Group as the builder for two of their upcoming residential developments in March.
They'll be building The Villas in Neutral Bay and Northcote Collective in Naremburn.
The Villas, located on Premier Street near Forsyth Park, is a five-level residential development comprising 18 spacious two and three-bedroom apartments, while Northcote Collective will bring the first new residential project in Naremburn for several years, offering 58 Rothelowman-designed apartments across a seven-storey and four-storey residential building.
Third.i Group has also appointed iCIRT-rated builder Dilcara as the builder for its boutique Potts Point apartment development, Muse.
Charter Keck Cramer believe that, with expected rate cuts, or at least rate retention, coupled with the introduction of Federal Government Stage 3 tax cuts, the outlook for the residential property market is expected to be more favourable by mid-2024.