House prices in some suburbs on Sydney’s upper north shore rebounded sharply in the past three months.
House prices in some of the more expensive suburbs in Sydney and Melbourne have rebounded sharply in the past three months, gaining as much as 7 per cent, as more buyers flock to the upper end of the market to take advantage of weaker values, data from CoreLogic shows.
Sydney’s upper north shore and Melbourne’s inner east dominated the areas where values swung back from declining values to strong growth in the past three months to April, despite uncertainty over interest rates.
“It doesn’t surprise me that a lot of those expensive suburbs are bouncing back because they have been weak in the past few months. So it’s providing a more affordable price point for more buyers to enter the market,” CoreLogic research director Tim Lawless said.
“This segment also tends to be volatile, so it’s something to watch if the trend continues for another quarter.
“But it’s a rapid turnaround and really underscores the resilience of the housing market despite low sentiment.”
Ray White chief economist Nerida Conisbee said the stock shortage and rising demand from wealthy buyers also likely bolstered growth.
“There are fewer luxury homes for sale because some vendors are a bit cautious at the moment. At the same time, there are a lot of wealthy buyers who made their money in cryptocurrency, gaming or mining and who don’t rely on mortgages, and are now coming into the market,” she said.
“We know that owning a luxury home as a primary residence is a tax-free way to hold wealth, so those trophy homes continue to be in very high demand as a result.”
Despite the sector’s volatility, the top end would likely continue to strengthen amid lack of supply and rising demand, Ms Conisbee said.
Protected from planning code changes
“Premium homes, particularly those with large land components, would likely hold their value because of scarcity and rising land value,” she said.
“They tend to be more protected from changes to planning codes, so you’re unlikely to see a flood of apartments in those markets.”
Gordon on Sydney’s upper north shore led the pack with a 7.1 per cent lift in the median value in the past three months, a sharp jump from a 1.4 per cent decline in the previous quarter. Houses in the suburb gained nearly $250,000 in just three months on average, taking the median to $3.8 million.
House prices in St Ives Chase, North Turramurra, East Killara and North Wahroonga also picked up steam, rising between 3.4 per cent and 5.7 per cent after dropping by up to 6 per cent in the previous quarter. Median values in those suburbs currently sit between $2.7 million and $3.6 million.
Bronwen Lipscombe, selling agent with McGrath Wahroonga, said the lack of stock was fuelling steep competition from buyers and pushing prices higher.
“We’ve always had strong demand because we have great schools in the area, but stock has dropped sharply because vendors are holding out, maybe for better prices,” she said.
BresicWhitney chief executive Thomas McGlynn said the upper north shore continued to enjoy strong demand from Chinese buyers.
“We haven’t seen a downturn in interest from the Chinese market,” he said. “The quality of stock hitting the market has also been really good, so it’s attracting strong competition, resulting in strong sales results in the past three months.”
In Melbourne, house prices in Kew East, Balwyn, Kew, Balwyn North, Brighton and Camberwell jumped by up to 5.5 per cent in the past three months, rebounding from a 3 per cent decline in the previous quarter and defying the broader weakness of the city’s housing market.
“I think there’s some really good buying opportunity in Melbourne’s premium markets because they’ve been pretty weak since the pandemic, and people are now taking advantage of it,” Ms Conisbee said.
The upper end segment of Brisbane market also rallied in the past three months, led by inner suburbs Balmoral and Wilston where house prices jumped by more than 4 per cent, bouncing back from around a 2.5 per cent drop in the previous quarter.
In Perth, house prices in Swanbourne and Dalkeith sprang back into recovery, notching 7.4 per cent and 1.7 per cent in the past three months respectively. This is a sharp rebound from the previous quarter when values fell by 0.6 per cent and 3.6 per cent respectively.
(Fin Review – May 2024) If you would like assistance with a home loan health check, purchasing property or refinancing, or to discuss any other lending needs, please do not hesitate to contact Geoff.
PROSPERA FINANCE — Geoff Norman
MOBILE LENDER PROVIDING MORTGAGE BROKERING SERVICES — FINANCING HOME LOANS — FIRST HOME BUYER LOANS — CAR LOANS — LOW DOCUMENTATION LOANS — EQUIPMENT LEASE
