2023 has been a much more positive year than 2022 for the property market, with green shoots of growth emerging once again.
Sydney’s auction clearance rate has been over 70% for most of this year (often the sign of a seller’s market), and in the Eastern Suburbs, it currently sits at 63.9%.
Three-bedroom apartments a standout success story
| Apartment size | Median value | 12-month growth to August 2023 |
|---|---|---|
| Overall apartment median price | $2.475 million | -11.6% |
| Two bedroom apartments | $1.755 million | -27.5% |
| Three bedroom apartments | $4.75 million | 12.4% |
While the median value of a two-bedroom apartment in Darling Point has fallen over the past year, there’s more to the story than meets the eye.
Firstly, it’s important to note that two-bedroom apartments experienced this fall on the back of phenomenal capital growth of 26.1% over 2021 and 2022.
Secondly, the Reserve Bank of Australia (RBA) started raising the official cash rate in May 2022, taking it from 0.1% to its current setting of 4.1% in just over 12 months. While interest rates have been far higher historically – like in 1990, when the cash rate hit 17.0% – the past year represents the fastest and most prolonged period of rate hikes on record.
This has impacted buyers who need finance to purchase their property. In Darling Point, we’ve seen it play out in the two-bedroom market, as interest rate rises have lowered the amount many borrowers can afford.
In other market segments – such as the market for large, three-bedroom apartments or penthouses – interest rate rises have had less effect. The demographics buying these properties tend to include expats, downsizers, and others who may not even have a mortgage.
In good news for those who do need to borrow, many experts believe that the RBA’s decision to hold off on any rate rises in July and August 2023 could signal the end of any further increases. Some economists believe it may even pave the way for some decreases in the official cash rate by early 2024.
Large, prestige apartments showing the most capital gain
We’re finding that there is still incredible demand in the prestige market, with properties in this category selling for well above the median.
At the top end of the market, in April, we sold 1/40-42 Mona Road, an entire floor four-bedroom apartment in ‘St Marks Terraces’ for $10 million. This house-sized apartment with lift access commands breathtaking harbour and city skyline views and double parking. And this sale wasn’t an outlier – with four other Darling Point apartments selling between March and May for $6.26 million, $8 million, $10.425 and $14 million.
We also sold 6C/13-15 Thornton Street, a large two-bedroom apartment in Hopewood Gardens, for $3.7 million. The excellent price reflects the strong appeal of this coveted building and the apartment’s size and North-East corner position with panoramic harbour views.
In June, we sold 3B/21 Thornton Street, a generous three-bedroom, two-bathroom apartment in Thornton Place with double parking and a stunning aspect, for $3.2 million.
A fall in supply of listings
According to SQM Research, the number of listings across the city in July 2023 was down 16% compared to July 2022. In postcode 2027, it’s a similar pattern, with the number of listings falling from 52 in July 2022 to 37 in July 2023 – a decline of 28.8%.
Part of this is driven by longer “hold times” for property. When there’s less for sale, it tends to breed a cycle where people stay put, unable to find their next home. The average tenure for a house in Sydney is now 12.4 years, according to realestate.com.au, an increase from where it once stood at 9.3 years in 2010.
Just researching the market?
Apartments are now held for an average of 9.6 years, up from 7.7 years in 2010.
With Spring selling season just around the corner, we expect an uptick in new listings coming onto the market.
A rental market in overdrive
Sydney’s rental market has been experiencing significant price increases over the last year, and Darling Point is no exception.
According to realestate.com.au, weekly rents are up 17.6% across the board for Darling Point apartments over the past 12 months. The average weekly rent on a one-bedroom apartment has risen 17.8% to $750 -$850 per week, and for two-bedroom apartments it has increased 14.7% to $1,400-$1,600 per week.
Three-bedroom apartments have experienced the highest rate of rental price growth at 26.9% to reach $2,500 -$3,000 per week.
The vacancy rate is now just 2.74%. All this is excellent news for investors and landlords but presents challenges for many tenants, some of whom may find it more economical to buy.
Current listings
‘Longwood’ 9C/5-11 Thornton Street, Darling Point
This apartment has a truly stunning location in the coveted ‘Longwood’ building on the very tip of Darling Point, with views stretching to Manly. This 9th-floor residence offers three bedrooms, two bathrooms and parking, with access to all the amenities Longwood is famous for.
‘Ranelagh’ 21A/3 Darling Point Road, Darling Point
This two-bedroom apartment on the 21st floor of popular Ranelagh offers stunning views and convenience.
We also have two stunning apartments in ‘Retford Hall’ on the market:
Apartment 5B/23 Thornton Street, Darling Point, offers two bedrooms and double parking and occupies a niche corner private position, with wide windows filling the apartment with natural light and framing extraordinary views. It has a price guide of over $4 million.
Apartment 4A + 4C/23 Thornton Street, Darling Point, with three bedrooms, a fourth bedroom or study space, parking for four cars, and luxe finishes, this apartment encompasses approximately 167 sqm, with bespoke renovations throughout and a guide of over $8 million.
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, get in touch.
