Source: Domain
The Sydney property market in 2024 witnessed a notable trend: units outpaced houses as the most purchased property type. According to Domain’s End of Year Wrap, units accounted for 45.9% of sales, surpassing houses, which made up 44.3%. This marks the second consecutive year where units have been the dominant property type in Sydney. Elevated interest rates, rising living costs, and a shift in buyer priorities contributed to this dynamic, reflecting broader affordability challenges.
Australia’s cash rate remained steady at 4.35% throughout 2024, significantly impacting buyer behavior. Elevated borrowing costs led many prospective homeowners in Sydney, the country’s highest-value market, to consider smaller, more affordable properties. Units emerged as a practical choice, meeting the demands of both first-time buyers and investors navigating a challenging financial landscape.
While Sydney’s market favored units, the national data painted a different picture. Across Australia’s capital cities, houses dominated sales, accounting for 63.6% of transactions compared to 27.5% for units. Townhouses, often viewed as a middle ground between units and houses, were underrepresented nationally, with only 6.3% of sales.
The property market’s activity has been shaped by both buyer and seller behavior. LJ Hooker Group’s head of research, Matthew Tiller, observed that vendors are adopting a cautious approach, awaiting potential rate cuts in 2025. Although listings surged earlier in the spring, they tapered off faster than anticipated, as sellers hope for a more favorable market environment.
Buyers, on the other hand, remain active but deliberate. Increased demand for property valuations indicates a potential preparation phase for rate cuts, which could stimulate listings and transactions. Ben Thompson, Employment Hero’s CEO and chief economist, noted that the December decision to hold the cash rate underscores the delicate balance between controlling inflation and supporting economic stability.
As Sydney continues to grapple with affordability challenges, the rise of units as the most transacted property type signals a shift in market dynamics. For now, the Sydney property market remains a dynamic landscape, shaped by economic conditions and evolving buyer preferences.
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