Big cities are on the way down when it comes to price growth, while smaller regional hubs are on the up
Sydney's property market has been in a downturn since late 2017, and it looks like other major regional cities in NSW could be starting along the same path.
“Big-city neighbours Newcastle, Central Coast and Wollongong are also showing clear signs of the growth cycle being well and truly over,” says Simon Pressley, managing director of Propertyology.
“But it’s a different story in many middle-tier regional NSW cities. Places like Orange, Dubbo, Bathurst, Armidale, Tamworth, Wagga Wagga are at the early stages of their cycle.”
The affordability of these pockets is what draws buyers, especially with Sydney now hitting the wall in terms of growth.
“The cooling in the market is due more to the market hitting its affordability limit than from it having an oversupply of property or running out of willing buyers,” says OpenCorp director Matthew Lewison.
A first home buyers’ market
NSW as a whole could spend the next few years moving towards a first home buyers’ market.
“The lower end of the market is quickly becoming the most active, with first home buyers starting to push into the market,” Lewison says.
“This may lead to price growth at the lower end as there is more competition for properties below the current median house price.”
The tide is also turning in the rental market and vacancy rates are rising, to the delight of tenants, according to the REINSW Vacancy Rate Survey for April 2018.
“There appears to be a saturation of supply, and agents are noting that previously high rents are becoming increasingly difficult to obtain,” says Leanne Pilkington, president of the Real Estate Institute of NSW.
The demand-supply balance is kept in play by the high population numbers in Sydney, but in this climate it is all the more important that interest rates stay steady.
“The residential housing market, and the economy generally, requires the steady interest rate environment to continue,” Pilkington says.
“Employment growth has been encouraging but tempered by flattened wage growth, while house price growth is also subdued and clearance rates are solid, if unspectacular.”
SUBURB TO WATCH
LIDCOMBE: Million-dollar house market
Situated 18km from the Sydney CBD, the suburb of Lidcombe is a bustling public transport hub. The local railway station is connected to four lines: the Olympic Park Line, the North Shore, Northern and Western Line, the Inner West and Leppington Line, and the Bankstown Line.
Several bus routes also have Lidcombe as a stop, including Transdev NSW and NightRide. Several examples of heritage architecture are located here, such as the Railway Hotel. There are also many schools in the suburb.
Houses passed the $1.2m mark in the year to April 2018 as values rose by 5.9%. Meanwhile, the unit market has been no slouch as it has maintained growth, although this has been slow.
Transport: Lidcombe is a transport hub with both buses and train services to Sydney
History: Lidcombe has a number of heritage sites, including the Railway Hotel