The past couple of years have been good ones for the Darling Point property market.
Domain data shows that the median three-bedroom apartment in our suburb value grew 62.2% over 2020 and 2021, while the median two-bedroom apartment value grew 26.1%. But with interest rates at their highest level in a decade and cost of living pressures rising, can we expect the same growth to continue in 2024?
Here are my five trend forecasts for the coming 12 months.
1. Prices to keep rising across the board
At the start of 2023, the banks were predicting double-digit price drops for the year ahead. Instead, what we got here in Sydney was double digit price growth, with CoreLogic reporting a median property price rise 11.1% over 12 months.
The banks were making their forecasts based on the belief that interest rate rises would start to bite, economic conditions would deteriorate and some home owners would be forced to sell.
What this failed to take into account was that property prices are always set by the laws of supply and demand, and there are simply too few properties on the market compared to the number of people in Sydney who need somewhere to live.
This isn’t just reflected in growing sales prices either. It also shows in the rental market, with Sydney’s median asking rent rising 15.5% over 2023, according to SQM Research.
Until we see a sharp rise in the number of properties coming to market, or a sharp decrease in the number of people looking for a home, expect these numbers to keep going upwards – even if there is the odd lean month or two.
2. Darling Point to outperform the market (possibly by some way)
While we expect Sydney’s market to continue rising, we also expect Darling Point apartments will outperform most of our city, potentially by some way.
Darling Point has been one of the best markets in the city, with Darling Point apartments registering 12.2% growth over the past 12 months and 26.2% over the past two years, according to realestate.com.au.
Domain’s data also shows that the value of three-bedroom Darling Point apartments has almost doubled since the start of 2021.
This growth has helped cement Darling Point’s status as one of the best apartment markets in the country. In fact, CoreLogic’s Best of the Best Report 2023 named our suburb as Australia’s second most expensive apartment market, with a median value of $2,656,789. Meanwhile, realestate.com.au pegs the median value even higher at $2,902,500.
3. Downsizers to remain the decisive factor in our market
Downsizers have been the key demographic in our property market for some time now, so it may come as no surprise that we expect them to be the main buyers in our market again in 2024.
Just researching the market?
After all, downsizers tend not to be impacted by the same constraints as many other market segments. Many pay cash and are largely unaffected by high interest rates. Instead, the relative health of the sharemarket, as well as the price they can achieve for their own homes matter more – and right now both look good.
Besides, the number of people at, or close retirement age is growing, so we expect more people to start looking to downsize. On top of this, for lifestyle reasons a lot of people are choosing to downsize earlier in life, often while their children are still living at home.
4. Low stock levels to persist
A lack of properties for sale has been a persistent problem in our area over the past few years, and – apart from a few minor flurries of listings over 2023 – it remains an issue today.
SQM Research shows that, across the Eastern Suburbs, there were fewer property listings over 2023 than 2022, and we were already concerned about the lack of stock coming to market then.
Unless demand falls, low stock levels usually means increased competition and rising prices – which won’t necessarily make for happy reading for buyers.
The ray of hope for buyers, however, was that the strongest months of the year for listings were September to November (few properties tend to be listed in December or January), which could be a sign that the lack of stock may ease slightly.
5. Prestige property to stay in demand
Our local prestige market has been performing incredibly well over the past few years. In fact, Sydney has been one of just five cities around the world where sales over US$10 million actually increased in the third quarter of 2023.
Last year we saw several record sales at the very top end of the market. This included the $55 million sale of Darling Point’s Serena complex (a block of four apartments) – the fifth most expensive property anywhere in the country. It also included multiple building and street records and other significant sales, such as 1/27 Sutherland Crescent.
We expect these strong conditions will continue throughout this year, and that 2024 will be another solid year for the prestige market. After all, the same conditions that have driven this market to new heights – such as a strong sharemarket, low Australian Dollar and lack of available stock – persist today.
Want more?
If you’d like to know more about the Darling Point property market or if you need help buying or selling a home in 2024, get in touch.
