December 2022 Quarter - Sydney

Posted By David Brown

Sydney's property market in 2022 has been characterised by a significant shift from the frenzied activity of the pandemic-era property boom to a more subdued and uncertain environment. After years of rampant price growth, the market has experienced a marked decline in housing prices, resulting in the steepest annual drop in the city's history. This has created both opportunities and challenges for buyers and sellers alike, as they navigate the changing landscape of the city's property market. In this context, it is crucial to understand the current state of the market, the factors driving its evolution, and the potential implications for those involved in the industry.

Sydney's housing market saw a slowdown in the rate of decline during the December quarter, with house prices falling at a third of the previous quarter's rate. Despite this improvement, house prices have still fallen for three consecutive quarters, resulting in the most significant annual drop in the city's history. Currently, house prices stand at 11.3% below the peak seen in March 2022, representing a decline of approximately $181,000, bringing them back to mid-2021 levels. However, it is worth noting that they remain substantially higher than pre-pandemic property boom levels, with an increase of 24.2%.

Domain House Price Report - December 2022 | Domain

In contrast, unit prices continued to decrease over the December quarter, but the rate of decline was only half that of the previous quarter and less pronounced than for houses. Notably, unit prices have now fallen for four consecutive quarters, a trend that has not occurred since 2018. Currently, unit prices are at 6.5% below the 2021 peak, representing a decrease of around $52,000 and placing them at lower levels than in March 2020. However, it's worth noting that unit prices had previously underperformed, with a modest increase of 8.9% during the upswing compared to the 40.1% surge seen in house prices.

In conclusion, Sydney's property market in 2022 has undergone a significant transformation from the record highs of the pandemic-era property boom. Despite the recent decline in house prices, the market remains substantially higher than pre-pandemic levels, albeit with substantial price differentials between houses and units. As the market continues to evolve, buyers and sellers alike will need to remain vigilant and adaptable to changing conditions, as they navigate the challenges and opportunities of the new landscape. The future of Sydney's property market remains uncertain, but with careful planning and informed decision-making, it is possible to achieve success in this dynamic and ever-evolving market.