Quarterly Market Report For Sydney's Eastern Suburbs Investors: Dec 2017

The fourth quarter of 2017 brought mixed results for Eastern Suburbs property investors. While sales prices have slowed, the rental market experienced low vacancy rates and high demand.

The December 2017 Quarter was a mixed one for Eastern Suburbs property investors. While the growth in sales prices flattened, the rental market was tight, with low vacancy rates and high demand. We also noticed some areas and price points performing more strongly than ever, with limited supply driving more competitiveness between renters looking for properties under $900 a week.

The Eastern Suburbs Real Estate Sales Market: Prices Flattening

The headline in the Sydney sales market has been all about prices flattening and, in some instances, even falling. This has been accompanied by a collapse in the auction clearance rate, which fell from a peak of over 85% at the height of the Sydney property boom to less than 50% by the beginning of December, according to CoreLogic.

But the headline rate only tells part of the story. The Eastern Suburbs has been more resilient than most of the city, still recording an auction clearance rate of over 70%, even as prices slipped more generally. This reflects its status as an A-grade property market, which is - to some extent - insulated from a general market decline. 

Eastern Suburbs Sales: Breaking It Down By Numbers

• Eastern suburbs auction clearance rate: 70% - 77% (Wentworth Courier: 18/11 - 25/11), 61% - 62% (Southern Courier 18/11 - 25/11)
• Median Sydney property price as at 31 December 2017: +3.09% change year on year; -0.93% change month on month ($895,342) 
  
• Median Sydney unit price: +5.42% change year on year; -0.6% change month on month ($774,124) 
• Median Sydney house price: +2.09% change year on year; -1.08% change on month ($1,059,306)

Eastern Suburbs Rentals: Strong Demand For Quality

The final quarter for 2017 was characterised by strong demand and low supply. More than ever, tenants expected renovated properties in good condition. Landlords who could meet their expectations usually found their properties were quickly leased. This was especially true for units in the range of $600-$900 a week and houses between $900 and $1,500 a week. Unrenovated and tired properties did not fare so well; landlords who hoped to rent these to good, qualified tenants found that they needed to drop price expectations to meet the market.

We noticed that the current rental market is being driven by a few factors:

• Uncertainty in the sales market, causing some people who were looking to buy to rent instead until they feel confident enough to purchase.
• Low availability, causing many tenants to hold onto their current rental rather than move.
• The natural Christmas slowdown in stock levels. 

Eastern Suburbs Rentals: Breaking It Down By Numbers

• Average days vacant (Taylors): 12 days

• Median Sydney rental price (units): $519.20 (week ending 12 Dec 2017)
• Median Sydney rental price (houses): $728.00 (week ending 12 Dec 2017)

• Vacancy Rate (real estate industry): 2.0%
• Vacancy Rate (Taylors): 1.5%