Sydney property prices surge to new record level, surpassing 2017 peak

Sydney property values have hit a new record high after another growth spurt pushed the city’s median price beyond the previous market peak in 2017.

Data published from research group CoreLogic showed prices have surged 5.7 per cent since October in what has been a rapid recovery from the pandemic.

A typical Harbour City property, based on sales of townhouses, units and houses, is now about $900,000.

CoreLogic head of research Tim Lawless said it would be welcome news for homeowners but it would also raise new housing affordability concerns.

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“It highlights the challenges for non-home owners looking to participate in the housing market as values rise faster than incomes,” Mr Lawless said.

The research group had earlier this month revealed prices grew in February at the fastest rate in 17 years, largely on the back of low interest rates and rampant buyer demand.

The skyrocketing prices have sounded alarm bells for the Reserve Bank of Australia, with governor Philip Lowe recently revealing his biggest concern during the boom was whether Aussies were continuing to borrow responsibly.

Christine Forster auction

Auctioneer James Hayashi said low rates have emboldened buyers. Picture: David Swift

Compouding the recent surge in buyer demand has been a shortage of available housing in many areas – especially freestanding houses with backyards.

That shortage has been partly fuelled by sellers’ reluctant to list out of fear they won’t be able to buy back into the market.

Over half of those polled in a recent Westpac survey of homeowners who were “ready to sell” said they wouldn’t pull the trigger on a listing because buyer competition was too stiff to move somewhere else.

It’s led to a vicious cycle where homeowners’ decisions to delay selling are making the market even hotter. This in turn is further discouraging would-be sellers from listing.

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Sydney auctions have been crowded in recent weeks. Picture: Sam Ruttyn

Real estate agent Brad Gillespie of The Agency said there was also pent-up demand from buyers who had originally wanted to purchase last year but delayed due to the pandemic.

“From the start of COVID to Christmas, a lot of people took themselves out of the market and they all landed back in after January,” Mr Gillespie said.

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