The Hills are alive: Sydney’s new apartment market branches out to the north west

The off-the-plan market in Sydney remains slow as buyers remain cautious in the current market, the survey indicating lower sales, in line with the previous quarter and the current results reported around the country.

Alex Stuart Associate Director at Urbis said, “Sydney is edging closer to meeting the undersupply of housing over the last five years, with our metro-corridors seeing highs in apartment development activity in anticipation of a modern train network being finalised. The current sales slump has developed over the past 12 months and it appears that slower sales rate will continue into 2019.”

The Hills region has experienced significant apartment activity as the local market has evolved from a house and land market. The Sydney Metro Northwest is due to open in mid-2019, which will increase accessibility and is anticipated to act as a driver for additional demand for apartments.

Mr Stuart said, “There are over 20,000 apartments in the pipeline, which marks The Hills as the subregion with the largest supply pipeline in Sydney.

“Around 9,200 of these apartments have lodged a DA and are awaiting approval indicating there is considerable uncertainty around the how much of this will actually be delivered, particularly as financiers tighten lending conditions for development.

“The majority of projects are strictly residential, with some mixed-use clusters around existing centres in Baulkham Hills and Rouse Hill.”

Canterbury-Bankstown is also anticipated to record increased activity based on the planned expansion of the Sydney Metro from Sydenham to Bankstown. There are 62 projects and 5,000 units currently in the pipeline though only three projects (211 units) have started presales. A further 1,200 units are under construction, 75% of which have a mixed-use component.

Eight projects launched in Q3 with a total of 939 units, 417 of which were in The Hills. Despite our expanded study area, this is the lowest level of sales launches experienced during the five years of our research. With continued population growth, a slow-down in dwelling completions may increase the risk of undersupply in the next 12 to 18 months. This is likely to be a catalyst for price stabilisation in the next year, with increased expectations of growth thereafter.

• Weighted average sale price recorded: $833,000
• 8 project launches in the quarter: 939 new apartments
• 1,654 apartments approved in the quarter