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The mortgage brokerage’s chief executive has stated that Sydney’s property market performance over 2023 could provide “important clues” for the year ahead.
According to chief executive of Shore Financial, Theo Chambers, the observations made in the December 2022 and June 2023 editions of the Shore Financial State of Sydney Report may illuminate the trajectory of the largest capital’s property market over 2024.
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Mr Chambers said a retrospective glance at price growth over 2023 can provide “important clues about the current market”.
“This time last year, the Sydney property market was in a fairly predictable place,” Mr Chambers said.
“We’d had a large boom during the pandemic, that had been followed by a correction, and it seemed like the market might fall a little more before entering a period of moderate growth.
“That’s largely how things played out.”
Mr Chambers said around six months ago, the property market in Sydney was in “a state of flux” and explained that it was difficult to ascertain whether demand was “being artificially propped up by low housing supply or if it was the result of genuine buyer interest”.
Mr Chambers outlined four factors that contributed to Sydney’s above-average growth in 2023 that included a rapidly increasing population bolstering demand; “ultra-tight” rental vacancies and prices encouraging people to buy; rising prices becoming a “self-fulfilling prophecy”; and supply is still low despite elevated demand.
“When you study all these data points and indicators, it gives us clues about what we can expect from Sydney prices in 2024,” he said.
“A lot of people felt that with interest rates elevated, unemployment rising, and Sydney’s median price close to a record high, we’d see only limited price growth next year. However, the reality could turn out to be very different.”
He added that demand is likely to remain strong amid strong external migration and a persistently tight rental market pushing more people towards the sales market.
“At the same time, the supply of new listings is likely to remain constrained because that’s been the trend in recent years and there’s nothing to suggest that will suddenly change,” Mr Chambers concluded.
“When you put all that together, there’s a reasonable chance the Sydney property market will be in boom mode in 2024.
“Where that might change is if the Reserve Bank kept pushing up interest rates, if unemployment spiked, or if a surge of vendors listed their homes to take advantage of higher prices. If that happened, price growth would be much more moderate.”
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