Sydney's Housing Market Reaches Record $2 Million

1

SQM Research has highlighted that their methodology tracks vendor asking prices, providing an advance insight into housing market trends. Historically, these figures have been indicative of the future trajectory of house prices. As per Domain, the median sold price for houses reached a record $1,645,400 in the last quarter of 2024.

The forecast for Sydney's housing market suggests further price hikes are likely. A combination of anticipated rate cuts by the Reserve Bank of Australia (RBA) and significant policy initiatives promises continued growth in housing values. Financial markets project five rate cuts this year, which could lower the official cash rate to 2.85% by the year’s end. Additionally, the Albanese government has proposed a universal 5% housing deposit guarantee for first-time homebuyers, effective from January 2026.

Under Labor's proposed policy, the government will guarantee up to 15% of the loan value, allowing buyers to avoid the average $23,000 lenders’ mortgage insurance cost. As Sydney's population could reach over 8 million by the 2060s due to sustained overseas migration, the demand for housing in the city is expected to intensify.

The increasing population is likely to result in a trend towards higher density living, with apartments gradually replacing single detached houses. This transition will further amplify housing values in the city.

The surge in Sydney's housing prices reflects broader economic policies and market dynamics. The anticipated decrease in mortgage rates and the easing of housing access through policy reforms could continue to fuel the housing market's growth. This scenario is likely to strain affordability, impacting prospective homebuyers who may find the market increasingly inaccessible.

Looking ahead, the housing market is expected to keep climbing, especially as supportive economic conditions persist. The impact of government policy on housing affordability, particularly for first-time buyers, will be central to future discussions as these initiatives take effect. Moreover, as Sydney becomes denser, strategic urban planning will be critical to maintaining the city's liveability amidst rising population pressures.

Published:Thursday, 17th Apr 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Markets Respond Cautiously to U.S. Tax Changes Amid Mixed Global Trends 23 May 2025: Paige Estritori Financial markets exhibited a measured response following the U.S. administration's introduction of new tax legislation, a development that is expected to significantly increase the national deficit. Despite initial positive momentum on Wall Street, much of the gains receded by the session's end. Similarly, European markets experienced mild selloffs, signaling uncertainty among investors. In Asia, a mixed response was seen, with Australia outperforming other regional markets, although with minor losses. - read more

RBA Rate Cut Sparks Concerns Amid Rising Housing Market Outlook 21 May 2025: Paige Estritori The Reserve Bank of Australia's recent decision to reduce the cash rate by 25 basis points to 3.85 per cent has stirred reactions among young Australians and financial experts. The decision provides relief for current homeowners but poses challenges for first-time buyers due to anticipated housing price increases. - read more

Investors Shift Focus to Hedged International Equity ETFs Amid Volatility 19 May 2025: Paige Estritori New insights from InvestSMART reveal a noticeable shift in investment preferences from Australian equity Exchange Traded Funds (ETFs) to global equity ETFs, particularly hedged international equity ETFs. This development comes in light of investors' efforts to guard against currency fluctuations. - read more

RBA Rate Cut Possible Despite Eased US-China Tariffs 19 May 2025: Paige Estritori Economists are largely forecasting that the Reserve Bank of Australia (RBA) will reduce interest rates during its upcoming meeting, although recent international developments add some uncertainty to this prediction. Notably, US President Donald Trump's decision to lower tariffs on China prompted a reciprocal tariff reduction by Beijing, leading to a rise in risk asset values, including shares. - read more

Australia Records Historic Fall in Disposable Income 16 May 2025: Paige Estritori Recent data from the Australian Bureau of Statistics (ABS) revealed a historical drop in real per capita household disposable income for Australians, marking an unprecedented fall of around 8% since mid-2022. This decline represents a significant issue, with Australia experiencing the largest decrease in the developed world, according to the OECD. - read more