Has Sydney saved itself from the property market cliff in the wake of Spring?

With a turbulent start to 2023 given consecutive interest rate rises, diminishing property stock and extremely low consumer sentiment, Sydney was on the brink of falling off the cliff.
 
But according to Property Expert, Suburbanite Principal and Valuer, Anna Porter, the outlook is stable for the rest of 2023.
 
“Whilst the cost of living bites and interest rate rises have put downward pressure on values over the 2022 and 2023 period, the lack of stock and the lack of new building occurring due to pricing pressures in the building sector will continue to drive a lack of supply to the market,” she says.
 
“With supply levels remaining low and demand still buoyant, prices are expected to stay stable and not trend further backwards for the rest of the year.”
 
The expert however believes this does not mean growth and instead suggests growth in values will remain minimal as borrowing capacity remains limited for many buyers now with the higher rates assessments dampening people’s ability to service large debts.
 
The median Sydney house price still stands above $1 million at $1,098,821 – a value many households still cannot attain.
 
“High values will keep numerous buyers on the side lines for now and still priced out of Sydney’s expensive real estate market,” Porter shares.
 
“There’s no secret there is evidence that Sydney has started to recover from the 2022-2023 declines, which saw a downward spiral in housing values across the capital,”
 
“The latest data shows a modest recovery and on the ground we are seeing this being driven by the lack of housing supply being listed.”
 
So did Spring bring the supply boom to the market many hoped for?
 
“The traditional Spring boost in housing stock has not been as strong as exacted and many agents are seeing stronger demand than supply continue in most suburbs around Sydney,” she suggests.
 
“It is a similar story across the country with Corelogic reporting, a -18.7% below 5 year average total listings for the four weeks ending 27 August.”
 
It is important to note 880,000 fixed rate home loans are coming to an end in the last half of 2023 so the fixed rate cliff is still looming, and the rising cost of living is starting to be felt by households.
 
Porter believes the pause on rate rises has been a breath of fresh air for property owners and mortgage holders across the capital.
 
“This pause has allowed most Sydney home owners time to catch up to their new cost of living and start to make the adjustments they need to survive,” she exclaims.
 
“Less dinners out, dropping the credit card balances down and not as many holidays is certainly some of the adjustments we are seeing households make,”
 
“The question however is, will it be enough for people to stay above water on their mortgages. So far, the answer is yes,”
 
“With mortgage arrears, of 30 days or more in arrears still typically sitting under 3% of mortgage holders, The S&P Global Ratings figures show mortgages more than 30 days late are highest in Sydney’s south-west, with some 2.5 per cent behind but this is still manageable considering the economic environment we are in currently.”

Anna Porter

Anna Porter (Grad Dip UEM, CPV AAPI) is one of Australia’s most popular Property Commentators, the Principal of Suburbanite and a qualified Property Valuer. Currently, Anna is dedicated to helping everyday Australians make money through property and avoid the pitfalls of the property market.

Anna’s media debut began in 2016 where she shared the stage with Mark Bouris and Andrew Morello as the property expert on the 2016 and 2017 Prosperity Through Property Australian Tour. In 2019, Anna proudly took up a weekly segment on YourMoney for its duration on air. Anna also regularly joins the team on Sunrise, Nova Radio, AusBiz and 2GB to offer the latest advice and expert commentary in buying, selling and investing in the Australia Property Market. She also routinely shares her thoughts with Fairfax Newspapers, MoneyMag and the Australian Property Investor Magazine just to name a few.

Away from the camera, Anna is sought after as a keynote for many leading events in the property industry including Thought Starter and MFAA Conferences. Porter is a published author and saw great success from her book ‘Whistleblower’. She also runs education programs for companies like Caltex, Optus, Flight Centre and Cricket NSW.

As an accomplished valuer for almost 20 years, Anna has worked on many institutional portfolios with thousands of assets across various property sectors. She still enjoys working one on one with ‘Mum and Dad’ investors and first time investors to help them start their investment journey the right way. Anna is passionate about growing her company and has rolled out the very first National Franchise Company in the property investment and buyer’s agent sector. As well as being an avid advocate for the property sector, Anna is a mum of two children, Billie and Zac. Outside her working hours you’ll find her riding with her beloved horse, out and about in nature or dining with her family.