Sydney’s new apartment market prepares for a better year ahead

Sydney rebounded slightly in Q4 2018 with the report indicating more sales than the previous two consecutive quarters. Sales as a percentage of available stock rose to 6% in the December quarter, after a drop to 3% in the previous quarter.

While available stock is low, five projects launched in the December Quarter comprising a total of 977 new apartments. Over 2018, there were a total of 7,459 new apartment launched, 24% lower than the overall launch figures for 2017.

“We expect project launches to decline in 2019 as existing stock is absorbed,” Mr Stuart said.

Pending products for 2019 do little to resolve the tension, with only five projects identified for sales launches in the first quarter of 2019.

The number of apartment projects moving through the planning process is also decreasing with only 1,235 apartments receiving development approval in the quarter.  With the future supply pipeline continuing to slow, the off-the-plan market could quickly move back to undersupply once the current wave of construction completes and underlying population growth absorbs this supply over the next twelve months.

Sydney recorded a weighted average sale price of $899,793 in the fourth quarter of 2018, with a large proportion of sales being in the inner ring.

1-bed 1-bath products (both including and excluding a car space) made a surprising impact in quarter four, taking out the majority of sales (41%) after years of favouritism for 2-bed 2-bath products. This could reflect first home-buyers looking for entry level product accounting for a higher proportion of buyers in the market.

• Weighted average sale price recorded: $899,733
• 5 project launches in the quarter: 977 new apartments
• 1,235 apartments approved in the quarter