Sydney unit prices - what's your bet?

Wages stagnated for a decade, rates are low, prices are up.

I'm personally seeing a lot of friends in their early 30s stretching themselves (dual income too) to buy 2 bedroom units. Assuming immigration doesn't open up until 2024 (mentioned by the gov), what's everyone's bet on 2-3 bedroom units in Sydney?

Personally I think wages will have to go up for prices to increase anything more than 20%. Unless 3 way relationships are the new norm

 

Never really understood the wages reasoning.

if population increases and pay rises come from promotions....

as you observed, the last boom happened without wage rises.

 

Well population is net neg without immigration? Wages take promotions into account...

Last boom happened due to cash rate and savings increase. Both of which are now harder to squeeze upwards. Hence the interest

 

dont care about the short term. Though check the number of overseas aussies that came back during the covid period and see whether thats included in the immigration stats.

long term, believe that immigration will start up again.

Personal opinion only.

only point being wages dont have to rise for prices to go up.

do wage stats take promotions into account? A person goes from 50k intern to 100k supervisor, they hire a new intern for 50k, the old supervisor who was on 100k retires. What do wage stats show?

 

2 bedroom apartments specially new are historically the worst performing assets in Sydney real estate market. With Covid, apartments have hit a new low as people are spending more time at home and don't want to get stuck in an apartment.

Wages is just one factor in the big picture.. cheaper lending costs, foreign money, debt recycling and many other factors influence the housing markets.

Immigration has slowed down but volumes have been replaced by cash rich aussie expatriates returning home.

 

This is not the case in Bondi, Rose Bay, et al atm. The markets are strong.

Many units doing really well. My friends unit just sold off market last week. He was hoping for 1.4m would be great. No parking even. 2/1/0.

Sold 1.6m.

.

 

I think 2/3 Bed Apartments will start to rise strongly as people are being priced out of free-standing homes and decent Town Houses and are forced into apartments as an alternative

 

Prestige suburbs, older blocks, partial sea views are a different story.

99% of the rest of the apartment stock in Sydney is suffering.

I noticed that apartment rentals have taken a massive hit post covid. Corelogic reporting an 8% drop and in reality I have seen rents drop to 2010 levels in most places.

Freestanding houses is way to go in Sydney (if you can find any).

 

My 2 bed unit was listed for rent on Thursday. 8 groups through yesterday afternoon and priced at highest end for area. There’s demand for the right units in the right locations.

 

Which area? Is your apartment high end for the area? I've noticed lemons - mid range are really struggling with vacancy

 

Hopefully! We just bought a split level 3 bed apartment on the Lower North Shore for our PPOR recently. Long term we are hoping we can either convert it to an IP 5-10 years down the track, or sell with enough equity to jump into a house once we have kids.

 

Cookie cutter units are holding up ok but the ones that are special - views, sunrooms, Art Deco, 3 bedders, direct access to common gardens, prime locations - they're doing as well as houses.

 

Lower North Shore.

Nothing special but real lack of options in this particular area

 

I've been finding that the more dense an area, the biggest impact to unit rentals. Especially in areas with similar high rises eg CBD and Rhodes or lots of older style apartments eg North Parramatta. Other places in the East and Lower North Shore are travelling along ok albeit slightly lower.

 

Short list of suburbs which have "affordable" apartments (ie big gap between median house and unit prices). Of that list, I like Neutral Bay the best.

 

20% discount in Harris Park, hit by pause on international students (which is quietly not as paused as it was this time last year).
If I were a first home buyer again, I'd definitely be getting in there and enjoying the space in the streets, in the boutique block of units and on my mortgage.

I feel for the ones who have to sell, and there was no way of knowing that immigration would be so dramatically affected.

I've had the luxury of putting my rent back by 20% too, because I can, because I bought when prices were down, like now. I've got a great single, minimalist tenant easily covering P&I plus strata. I lived in my flat for a few years and did the basics like polish the floors, redo the kitchen, retile the bathroom, paint, etc. though most units in the area appear to be renovated now, anyway.

It may not be so easy to buy at 400K - 430K and then advertise at low rents, but if you could live there right in the centre of Sydney with everything you need and great transport on a low mortgage, why wouldn't you? Diff story if born with silver spoon in mouth - I'm talking to the 99% .

The more young Aussies return to the area, the more it will gentrify. There is still a strong community of new arrivals there, which is great and adds a unique flavour. The Indian community will have become more settled and stable during this time. There is also the older Christian Lebanese community who have held there for ages.

The dramatic uptick cettainly hasn't happened yet ...

 

Latest list of suburbs with biggest gap between Sydney apartment and house prices
Sydney suburbs where buying units instead of houses will save you a fortune - realestate.com.au

 

Big price for 1 bedroom art deco apartment in Dulwich Hill, no parking - $1.01m
https://m.realestate.com.au/sold/property-apartment-nsw-dulwich+hill-135958150

 

It is but look at the floorplan- wouldn't be a stretch to make this into a 2 bedder.... still a healthy price though and especially sans parking

 

Are you saying the wage growth between 2004 and 2012 did not contribute what so ever to the boom of 2012-2017