Housing prices are on track to rise 4 per cent a month over the next six months in chronically undersupplied areas of Sydney, defying the surge in listings that has taken some heat out of the market in the NSW capital.
Demand most strongly outpaces supply in Pittwater, Warringah and Sutherland, while prices will also keep rising in Newcastle, Gosford, Port Stephens and the Snowy Mountains, where listings remained low relative to demand, data provider and consultancy Suburbtrends says.
In ACT Weston Creek, Tuggeranong and Woden Valley also face escalating prices.
“Most of these markets appear to have surged past their peak rate of growth during the last quarter, but the underlying strong demand and limited supply would likely keep them growing, albeit at a slightly reduced rate in 2022,” Suburbtrends director Kent Lardner said.
“Growth rates for these areas are expected to range between 1 per cent per month to a high of 4 per cent per month for the next quarter or two.”
ANZ has predicted Sydney dwelling prices to rise by 6 per cent this year, a sharp slowdown from last year’s 23.5 per cent growth. But the figures are a clear reminder that even as this happens some areas will continue to draw many buyers and trigger competitions for homes.
House prices in the Warringah area, which covers Frenchs Forest, Freshwater, Belrose, Narrabeen and Collaroy, are expected to climb between 3 per cent and 4 per cent each month over the next three months.
Similar growth is forecast in Woden Valley, which encompasses Curtin, Garran, Hughes, Chiefly and Lyons.
Newcastle, Pittwater, Gosford
Newcastle is poised to see up to 2 per cent growth each month over the next quarter or two, while Gosford house prices are on track to post up to 3 per cent monthly gain.
“The recent surge in listings was not enough to satisfy demand in these areas,” said Rich Harvey, chief executive and founder of Propertybuyer, a Sydney-based buyer’s agency.
“House listings have been tight for so long in areas such as Freshwater, Avalon and Newport on the northern beaches, where stock had fallen by around 40 per cent.
“With such a strong demand, I’m not surprised if we see another 5 per cent to 7 per cent price growth in these areas this year.”
Over the last 12 months, house prices across these undersupplied areas jumped an average 27 per cent as the inventory fell below one month’s worth of supply, Mr Lardner said.
“These are housing markets where inventory levels have been very low over the last six months, when effectively not a single month in any of them has over four months of inventory – a level when price growth starts to diminish due to oversupply,” he said.
“The current maximum inventory level is just two months, which means that if nothing else got listed for sale today, in under two months there would be no houses available to buy in any of these areas.
“Even allowing for a marginal increase in listings and a reduction in sales, these markets will remain very tight for the next six months, which will put upward pressure on prices.”
The Weston Creek district in Canberra has the lowest inventory at 0.48 of a month, or just 14 days’ worth of stock, while the Sutherland-Menai-Heathcote area has 0.79 month, or 24 days of supply.
In Newcastle, stock level is sitting at 1.41 months, Pittwater has 1.28 months’ worth of stock, while Gosford has 1.57 months’ of supply.
Supply of new housing was also likely to remain low across these areas, with the average number of building approvals sitting at less than 1 per cent of the housing stock, Mr Lardner said.
“The main problem exists along the coastal areas where we simply don’t have enough available land to expand supply, which is evident in the limited counts of building approvals,” he said.
“This will force buyers into adjacent areas, causing a coastal ripple effect between many regions and suburbs.”
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/the-sydney-suburbs-where-prices-will-grow-4pc-a-month-20220110-p59n55