In Sydney, the heat of the real estate market seems unabated, with house prices continuing to climb amidst ongoing tight housing supply. According to the Sydney Morning Herald, Domain data indicates that over the past year, house prices in multiple Sydney regions have increased, with Burwood leading at 35.8%, bringing the median price for a detached house to AUD 3.156 million. While the overall growth rate has slowed, prices in most districts remain higher than last year. Glebe, Fairlight, Marsfield, and Berala follow closely, with increases ranging from 24.2% to 33.2%. The Chinese-dominated suburb of Chatswood also made the list, with a 20.3% increase.
The upward trend in house prices appears unaffected by the shortage of housing supply, particularly in the unit market. Kirribilli led the unit market with a 34.3% increase over the past 12 months, with a median price of AUD 1.575 million. A relevant source noted, “High interest rates have limited impact on wealthy buyers. Prices in popular districts are driven by demand, with buyers purchasing whenever the conditions are right.”
Domain’s Powell observed an increase in buyers turning to outer suburbs to afford detached homes. Real estate agent Stier noted that rising living costs are pushing buyers to more remote areas to alleviate mortgage pressure. Affordable areas like Ryde, Marsfield, and around Macquarie University are becoming popular, with buyers making compromises in their choices. Consequently, the continuous rise in house prices and the shortage of housing supply have become defining characteristics of Sydney’s housing market.
Currently, the continuous increase in house prices and the shortage of housing supply seem unresolved. Chief economist Angela Jackson stated, “Australian house prices continue to rise despite high interest rates, mainly due to the imbalance between supply and demand, with new construction not keeping pace with population growth.” She believes that real estate is popular due to tax incentives and urges the government to reform stamp duty and capital gains tax.
This predicament has become an urgent issue that needs addressing. To cope, the government could increase public rental housing and cooperative housing to provide low-rent options for low-income groups. Additionally, housing subsidies and preferential loans could assist home buyers. For those moving to remote areas, relevant departments could improve infrastructure and transportation to attract them. Finally, market regulation should be strengthened to prevent price manipulation and unfair competition, establishing a sound regulatory system to supervise real estate agents and developers.
