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sydney property market

Sydney property market predictions 2019

February 11, 2019 9:00 am by Upside

CoreLogic’s December 2018 Home Property Value Index reported a continued downward trend for the Sydney property market, with a monthly drop of 1.82% and a yearly fall of 10.03%. Will Sydney experience further decline in dwelling values this year, or will the market start to pick up again? Here’s our Sydney property market forecast for 2019.

Sydney house prices set to stabilise in 2019

Sydney house values are predicted to remain relatively unchanged in the year to December 2019 after falling about 8% in 2018, according to Domain’s Property Price Forecasts. Overall, house prices are expected to fall by about 12% from their peak of almost $1.2 million in June 2017 to a low point of just above $1 million in mid-2019. This will bring Sydney dwelling values back to the level they were at in mid-2016.

Moving into 2020, the report predicts that the Sydney housing market start to pick back up again with predicted growth of around 4% throughout the year.

Likewise, a report by BIS Oxford Economics predicts that the combination of a price correction, undersupply and some improvement in the economic outlook could lead to a modest uplift in Sydney property prices in 2020-21.

Not surprisingly, tighter lending conditions have significantly impacted Sydney property prices, particularly for properties at the higher end of the market, but it’s expected that this trend will have evened out by mid-2019.

CoreLogic’s head of research Tim Lawless told Smart Property Investment he predicts that we’ll see lower rates of interest-only lending, higher loan-to-value ratio lending, and higher debt-to-income ratio lending, which could see Sydney house prices remain flat in 2019 but provide more opportunities for buyers looking for affordable housing options.

Predictions for Sydney home prices, and housing investment, year to December 2019

Economist Melbourne home prices Housing Investment
Steve Keen -10.0% -2.0%
Tony Makin -8.0% 6.0%
Margaret McKenzie -8.0% 7.6%
Craig Emerson -7.0% 4.5%
Richard Holden -6.1% 7.0%
Guay Lim -5.0% 7.0%
Michael O'Neil -6.5% 4.5%
Nigel Stapledon -6.0% -8.0%
Average -5.1% 2.1%
Rebecca Cassells -3.2% 1.5%
Mark Crosby -5.0% 3.0%
Ross Guest -5.0% 3.0%
Warwick McKibbin -6.0% -2.0%
Solmaz Moslehi -5.0% 3.5%
Renee Fry-McKibbin -1.0% 6.0%
Janine Dixon - -1.6%
Julie Toth - -2.5%
Source: ABC News

Sydney unit prices more resilient than houses

Sydney unit values are predicted to fare better than housing values, with prices predicted to grow modestly over 2019 and 2020 at around 3-5%, according to Domain. This is expected to happen after unit prices bottom out at an average of around $720,000 – bringing them back to their late-2016 level.

BIS Oxford Economic’s report also found that first homebuyer activity was supporting unit prices. One factor likely to support growth of Sydney’s unit prices is the NSW government’s stamp duty concessions, making it more affordable for first homebuyers to purchase property in a relatively expensive market. The large glut of new apartments being constructed in the city could result in a small oversupply of units, however strong population growth should mean this won’t result in any major price falls.

Some Sydney suburbs better off than others

Pricier Sydney areas like Manly and Paddington are seeing some of the highest views per listing in NSW and even recording modest price growth. More affordable suburbs like Kingswood and Richmond – popular areas for first homebuyers – are also seeing property value increases despite lower overall demand.

REA Group chief economist Nerida Conisbee told ABC News that mid-priced Sydney suburbs likely to see the largest drop in values throughout 2019.

"We are still seeing a pretty big drop in views per listing in Sydney," Conisbee said. "Right now, middle priced suburbs are suffering the most. And that impact in sentiment doesn't seem to be shifting."

Looking at NSW as a whole, select regional areas are seeing strong results. The Richmond-Tweed region, Byron Bay, Coffs Harbour-Grafton, and the Hunter Valley all performed well in 2018, and are expected to see continued growth throughout the year ahead.

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