City Beat September 2023: Sydney's off the plan apartment market starts to see increase in supply
The Sydney unit market continues to tick along in 2023, with growth of unit values only bettered by Brisbane over the year.
September saw another month of growth for Sydney units, which incorporates both apartments and townhouses, according to property data analytics firm CoreLogic's Monthly Hedonic Home Value Index.
Values grew 0.9 per cent, following one per cent gains in August and 0.7 per cent in July. Sydney unit values now sits at a median $829,000, rising by 7.5 per cent over 2023.
Read more: City Beat August 2023: Downsizers fuel Sydney's off the plan apartment market
CoreLogic’s research director, Tim Lawless said Australia’s housing recovery remains entrenched, with national dwelling values only 1.3 per cent off record highs. He said the outlook for housing values remains positive, albeit with some risks of a slowdown.
"Advertised supply levels are arguably the most important facet of the market to watch over the coming months," Lawless says.
"An acceleration in the flow of new listings is a normal feature of spring and early summer, however, if this trend continues we are likely to see buyers benefitting from more choice, less urgency and greater leverage to negotiate."
What's happening in the Sydney off the plan market?
Sydney is starting to see some projects get launched to the starved off the plan apartment market. There's also been some notable development applications and approvals in the last month or so, particularly in Chatswood, which will eventually help the Sydney apartment market supply in the future.
Prolific Sydney developer Urban Property Group recently launched La Vera, their first apartment project in Macquarie Park.
Designed by award-winning Cox Architecture, La Vera has 119 apartments across 14 levels. It's been designed to attract a wide variety of buyers, from first home buyers and investors to young families and downsizers.
Chief Executive Patrick Elias says they were in the market as soon as development approval was given, with demand far outstripping supply across Sydney.
"The lack of supply across Sydney has seen sales momentum remain incredibly consistent over 2023, with an uptick in recent months at our Bexley project Parc," Elias says.
"Developers who can get into a position with development approval and firm construction costs should be in the market. While supply levels are low, it is still critical for developers to create something which sets itself apart from other developments in the area."
Buyers at La Vera will also have the assurance of the NSW Government's LDI insurance scheme, which not many developments have. Urban Property Group were the first developer in New South Wales to have the defect insurance, at their Bexley project.
"This sends the message that we stand-by the quality of our developments and buyers can have peace of mind beyond the point of purchase," Elias adds.
Urban Property Group just secured approval to develop apartments in Little Bay which they will launch in early 2024.
Toohey Miller has too brought something new to the market.
They've just launched No.1 Onslow Place in Elizabeth Bay, a collection of just six full-floor apartments on the dress circle Onslow Avenue.
Toohey Miller Founder Nick Couloumbis says the market has responded incredibly well to the project.
"We’ve received over 1,000 enquiries before its upcoming official launch, which is significant given there’s just six full-floor apartments," Couloumbis says.
"Buyers have reacted to the rarity of full floor apartments in Elizabeth Bay, something which hasn’t been produced in years. It’s difficult to get approval for this kind of development."
Couloumbis says the majority of enquiry has come from downsizers, from locals to those looking to downsize from the wider eastern suburbs and lower north shore.
"There’s still a lot of buyers in the luxury market," Couloumbis says.