December Overview – Drawing the curtain on 2024

As we draw the curtain on another year and the 2024 property market is consigned to the record books, let’s reflect on the incumbent economic conditions and how they impacted property prices and buying and selling decisions. While data suggests that Sydney prices edged forward by 4.5% this year, this probably doesn’t pass the pub test when speaking with the general public.

It’s been widely acknowledged that higher interest rates and higher goods and services prices have finally caught up with us, even among the most affluent suburbs of Sydney. Of course, we can always read about the lofty sales in the $50m+ range but across the median house price point in any Sydney suburb over the past six months, it has been a most delicate trading environment. A weak auction clearance rate has been most evident and according to SQM Research, Sydney’s final weekly clearance rate has been below 50% for months on end.

A wise financial advisor once told me that in good times, most people are guilty of ramping up their lifestyles but when the tide turns, it’s very difficult to start cutting back on items that you’ve become accustomed to enjoying. As a result, we didn’t really see the property price crash when many rolled off their cheap fixed rate loans and entered the new higher rate environment where monthly repayments almost tripled. However, the data is showing that Australians have been depleting cash reserves and holding, waiting and hoping for a cut to rates and better economic conditions.

These improved conditions never materialised in 2024 and we saw new listings skyrocket through spring. Stock levels were 13% higher than we’ve seen since 2019, so buyers all of a sudden had plenty of choice. With a growing volume of property available, sellers had to adjust expectations as supply versus demand tilted in favour of buyers and overall conditions became a buyers’ market. Late in the year, the data started to catch up as CoreLogic noted prices began to fall in Sydney and the speed of the price falls accelerated into Christmas.

It’s merely a market cycle, however most would hold the view that we’re near or at the bottom of the cycle. With Australia in a per capita recession, such conditions should not linger for too long, although we need to do a lot to dig ourselves out of this weak economic environment. This leads us into the new year and conversations to start 2025 show cautious optimism. We’ll be looking for a reset in buyer enthusiasm and focus, with hope that this energy translates into positive transactions. Looming over the market though are the current economic conditions, with marginally falling inflation and higher rates still in play. Therefore, we suspect we’ll see a boost in buyer energy somewhat tempered by a restrictive lending environment that should keep market conditions balanced.

If our internal metrics are anything to go by, we’re expecting a healthy volume of new listings to come to market through January and some decent quality homes too. This will always inspire activity and market interest, so it will be busy. We know that our local regions remain among the most sought-after in Sydney and 2025 will only further reinforce the ongoing rise of Inner West markets and areas such as Lane Cove. It will be a playing field that experienced professionals can navigate with maturity, and across our team we have by far the longest-serving agents in the market. We’re around over the summer holidays and open for a discussion should you be considering a sale, a purchase or rental opportunity. Please feel free to have a conversation with us today and we hope you have a wonderful break.