Real Estate

Premium properties lead real estate revival, but is a double-dip housing downturn looming?

Sydney is continuing to lead a home price rebound, as property values close in on a return to pandemic boom peaks.

Two interest rate rises in a row appear to have done little to dent the market, particularly in the premium sector — the top quarter of homes by value.

CoreLogic data show a 1.1 per cent rise in national property values over June, backing up May’s 1.2 per cent increase.

Sydney’s 1.7 per cent rise was again the strongest last month, with Brisbane (1.3 per cent), Perth and Adelaide (both 0.9 per cent) the next largest.

Only Hobart (-0.3 per cent) saw prices fall in June.

Regional markets were weaker than most of the capitals, with prices up an average of 0.5 per cent.

Data calculated using a different methodology by rival provider PropTrack shows more modest gains but the same trend, with a 0.6 per cent rise in Sydney prices leading a 0.3 per cent national average gain.

Hobart and Darwin were the only two capital cities to record falling prices, although regional areas were generally also either dropping or posting very modest increases.

Adelaide and Perth are the only two capital cities currently at record prices, but many other locations are getting close.

Overall, regional Tasmania and regional Queensland have seen the biggest capital gains since the outset of the pandemic, both above 50 per cent, while Melbourne has seen the smallest increase of just above 15 per cent.

Home owners reluctant to sell

Carla Peacock knows the strength in Sydney’s premium property market first hand, after recently coming up short in her bid to secure a waterfront apartment in the city’s lower North Shore.

“It’s been hard, it’s been getting harder,” she told ABC News.

“The supply is short, the interest rates haven’t really dampened the interest because there’s less supply on the market.

“I think vendors are pulling out of the market, because they’re scared of their properties not going for the prices they want and, as a result, I think properties are often going for more than they’re actually worth.”

CoreLogic’s research director Tim Lawless said the data backs up Ms Peacock’s gut feeling.

“Through June, the flow of new capital city listings was nearly 10 per cent below the previous five year average and total inventory levels are more than a quarter below average,” he observed.

Real estate agent Matthew Smythe oversaw the sale of this apartment in Mosman on Sydney’s lower North Shore.()

Matthew Smythe, the principal at Belle Property in Mosman and Neutral Bay, was the agent selling the two-bedroom unit.

He said the market in his area was quite hot.

“We’re finding about two-thirds of our stock is selling before auction date, and then the balance is pretty much around auction date. So it’s still quite good clearance rates for us around here,” he observed.

“I think there’s a little bit more caution out there, but I think people are still willing to stretch, if it’s the right home, and it’s going to last the next 10 years.”

How are property prices defying rising rates?

Mr Smythe said, at the high end of the property market where he operates, many buyers are paying cash and so unaffected by interest rate rises.