Sydney’s real estate market has accelerated, with house values rising by $77,626 in the three months leading up to June despite the fastest cycle of interest rate increases in a generation.
According to the most recent House Price Report from Domain, which was released on Thursday, Sydney’s median house price hit $1,538,017 after rising 5.3% in the June quarter, four times faster than the prior quarter.
Considering that the city’s real estate market has now recovered roughly two-thirds of the value lost during the collapse last year, that amount is only 3.4% below the price peak of March 2022.
The unexpected boom was fueled by buyers vying for the few available properties and trying to get out of the already tight rental market, as well as stronger-than-expected immigration.
Some buyers, such as first-time homebuyers who receive assistance from the bank of mom and dad or government programmes, or elderly homeowners who have accumulated equity in their homes, are well-capitalized and less susceptible to rising rates. Demand was also fueled by upgraders who needed additional room to conduct home businesses.
The bullish trend, however, is not anticipated to continue for the rest of the year since, according to analysts, homeowners are starting to feel the effects of rapidly rising rates, more homes are being put on the market, and fewer homes are selling at auction.
Additionally, the median unit price increased 2.6% in the June quarter to $773,752, which is twice as fast as the growth in the March quarter.
As a result, there is less likelihood that the Reserve Bank will need to raise the cash rate significantly. Inflation dropped to 6% in the June quarter.
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