Sydney unit prices haven’t soared with the same intensity as house prices over the past twelve months—in fact, far from it.
Sydney house values are up 30.4% compared with a 13% rise in unit values, with the latter gaining most ground in the last few months. As we’ve previously predicted, demand for units (and subsequently, unit prices) will likely start to increase as our international borders reopen and key demographics in the rental market return on work and student visas.
Whilst we await an influx of migration, the housing affordability crisis facing many Sydneysiders in a market where houses rose by an average of $6700 a week, or $957 a day, perseveres. With Sydney’s median house price set to hit a record breaking $1.5M this weekend, unit purchases will continue to become more popular as demand is redirected from houses due to these affordability constraints.
Wait, isn’t this article supposed to be about unit prices falling across the city, and where they fell the most? Thanks for the segue. While it’s important to note that Sydney’s unit market is finally starting to see some forward momentum, not all suburbs are created equal. The biggest falls in unit values are in areas popular with migrants (who’re still awaiting our border restrictions to ease), like St. Leonards, Arncliffe, and Haymarket, which have seen up to 8% declines over the past 12 months. Meanwhile, in pockets of the Eastern Suburbs like Little Bay and Paddington, prices have soared 43.9% and 29.3% respectively.
An oversupply of apartments in high density areas like Haymarket and Pyrmont continue to flood the market. Investors are finding it hard to fill apartments, and demand for property in suburbs with close proximity to the CBD has plummeted since Sydneysiders began working from home and no longer considered their work commute a deciding factor in where they live. In Haymarket, unit values dropped close to 6% over the past twelve months, largely owing to an oversupply of apartments in a suburb that heavily relies on international students due to its proximity to UTS and Sydney Uni.
In Arncliffe, the Southern Sydney suburb that has landed itself on most ‘suburbs to watch’ lists over the past few years, median unit prices fell around 6%, now sitting at $670K. Nearby student-friendly suburb Wolli-Creek, popular for its proximity to public transport hubs, saw a decline of approximately 5%. Here, even house price medians have fallen into the negative, with an increase in the median house price of -0.68%.
In the Lower North Shore suburb of St. Leonards, unit values slumped over 8% between April 2020-2021. Though interest in the area is starting to pick up again, supply still far outweighs demand, with an estimated 229 visits per property against an average of 1596 visits per property in NSW. Current unit clearance rates sit at about 59%.
Nearby, multi-cultural melting pot Chatswood suffered a similar fate, with an oversupply of apartments (at the start of 2020, almost 50% of its occupants were renters) causing value to fall approx. 8% also. The Lower North Shore seems to have been hit reasonably hard by the rental devaluation bug, with Lane Cove unit prices falling 6.2% to a median of $834K between April 2020 to 2021. However, prices here are showing promise, with the median unit price rising to $853K this month
