Sydney’s housing market is showing promising signs of a speedy recovery, with prices expected to rebound sharply in the near future, according to data from CoreLogic. In March, values in Sydney rose by 1.4%, marking the sharpest increase since October 2021 and more than four times faster than the previous month. Melbourne, Perth, and Brisbane have also seen positive growth, with price increases of 0.6%, 0.5%, and 0.1%, respectively. Nationwide, home values increased by 0.6%, putting an end to an 11-month losing streak.

CoreLogic’s research director, Tim Lawless, attributes the earlier-than-expected turnaround in prices to a combination of low stock, a tight rental market, and additional demand from overseas migration in capital cities. Although some cities such as Hobart, Canberra, Darwin, and Adelaide have experienced a decline, the pace of decline has slowed compared to the previous month.

Cate Bakos, a Melbourne-based buyer’s agent, has noticed an increase in demand from immigrants and some share market investors. “We’re seeing new arrivals, including Chinese students, are now buying instead of renting. I’ve also had a large number of investors engage my services to buy property as a way for them to diversify away from shares,” she said.

Shane Oliver, AMP Capital chief economist, notes that it’s unusual for prices to rebound without interest rate cuts. However, he believes that surging demand from immigrants and tight rental markets could be playing a significant role this time around.

Overall, the unexpectedly strong bounce in Sydney’s housing market, particularly in the most expensive segment, suggests that the upper quartile of the market has likely bottomed out. Although some experts remain cautious about calling the bottom of the market, the current trend looks like the steep downturn since the start of interest rate rises will be followed by a rapid turnaround. A V-shaped recovery seems to be on the horizon.

Source:
AFR