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Property market update: Sydney, November 2021

By Zarah Mae Torrazo 15 December 2021 | 1 minute read

Sydney’s property market failed to heat up ahead of the summer season, as pre-Christmas sellers decked the market with listings in November and further cooled down the NSW capital’s pace of growth.


Despite Sydney recording another month of growth in dwelling values, the NSW capital lost more spring in its step in November, further sliding from its peak earlier this year.

According to CoreLogic, there are growing indications that the city’s heyday may be behind it now. 

Since a cyclical peak in the rate of growth in March 2021 – when dwelling values in Sydney rose at a record high of 3.7 per cent – there has been a notable trend towards milder monthly gains in the city’s property market. 

Tim Lawless, CoreLogic’s research director, commented that current market conditions no longer resembled those seen earlier this year.  “Virtually every factor that has driven housing values higher has lost some potency over recent months,” he stated. 


Growth in Sydney’s dwelling values has slowed sharply with the sudden rise in new listings and affordability pressures taking their toll, according to CoreLogic.  

Mr Lawless highlighted the factors that have weighed down on the city’s pace of growth leading up to November, stating: “Fixed mortgage rates are rising, higher listings are taking some urgency away from buyers, affordability has become a more substantial barrier to entry and credit is less available.” 

Unlike previous months when we’ve seen steady growth across most of the country, there are now cities that are soaring ahead and some property markets that are beginning to drag behind – creating divergent trends across Australian capital cities.

“Relative to the larger cities, housing affordability [in Brisbane and Adelaide] is less pressing – there have been fewer disruptions from COVID lockdowns and a positive rate of interstate migration is fuelling housing demand,” Mr Lawless said.

“On the other hand, Sydney and Melbourne have seen demand more heavily impacted by affordability pressures and negative migration from both an interstate and overseas perspective.”

But despite the not-so-sunny growth outlook for the NSW capital, he claimed that the 2021 boom is far from being over. 

“The heat’s come out of the market but it’s still a hot market,” he said. “Even though the market has slowed, the rate is still well above average. If you’re looking at the marketplace in Sydney, that 1 per cent [rise] is still nearly a $10,000 increase in a month.”

Has the city truly reached its peak in this cycle? Are boom conditions now in the rearview mirror for Sydney? Or will the city manage to stage a rebound in 2022? For now, here is a closer look at how Sydney performed in November 2021. 

Property values

Property prices across Sydney inched up 0.9 per cent over November, the slowest rate of growth since the January summer holidays, as a surge in listings and rising interest rates start to slow the boom in house prices.

The monthly gains are slower than the 1.5 per cent growth recorded in October and below the 3.7 per cent record-high notched in March 2021.

The median price of a Sydney home, based on sales of units, townhouses and houses, is currently 25.8 per cent higher than it was at this time in 2020 at $1,090,276. 

Sydney’s housing market posted a 1 per cent monthly increase in November, easing from the previous month’s 1.6 per cent increase, according to CoreLogic. 

Despite the slower growth, Sydneysider house owners still saw a more than $26,000 increase in the median house price in November, with the average house prices currently at a staggering $1,360,543. 

Meanwhile, the city’s unit market saw a 0.7 per cent gain during the month, easing from the previous month’s 12 per cent. Currently, units in Sydney have a median price of $837,169.

Generally, capital cities’ unit markets have continued to record a lower rate of growth relative to houses, with this trend most noticeable in the annual results.

Over the year, Sydney house values are up a stunning 30.4 per cent compared to a 15.2 per cent rise in unit values, with the median gap between apartments and houses in the harbour city at $523,000.

“With such a large value gap between the broad housing types, it’s no wonder we are seeing demand gradually transition towards higher density housing options simply because they are substantially more affordable than buying a house,” Mr Lawless said.

Supply and demand

Stock levels are having a strong impact on Sydney’s pace of growth, according to CoreLogic’s latest monthly data. 

Following a period in which there had been a shortage of properties listed for sale in Australia’s two biggest cities (Sydney and Melbourne), CoreLogic reported that Sydney listings were now back just below the five-year average, while Melbourne’s were 8 per cent above.

“There’s slowing momentum across Sydney and Melbourne in particular, which is reflective of the fact that stock levels across those cities have pretty well normalised,” CoreLogic’s head of residential research Australia, Eliza Owen, stated. 

Ms Owen said it was possible that some of the increase in the big-city listings related to Sydneysiders and Melburnians selling up to move elsewhere, but the expert also highlighted an increase in the number of property investors selling.

“That could be reflective of investors looking to cash out at what they perceive to be the top of the market, which could also be a reaction to the kind of announcement effect of APRA, you know, signalling tighter lending conditions,” she noted.

SQM’s data showed Sydney and Adelaide were the only cities to post an increase in listings in November, with the NSW capital seeing a 3.2 per cent increase to 30,111 from 29,183 in October 2021. 

Over the year, listings in the city are down by 5.5 per cent from the 31,880 total listings seen at the end of November last year. 

Louis Christopher, the managing director of SQM Research, said that while the decline in listings during November was expected, Sydney’s strong figures stood out. “We were expecting [a] fall in listings given the strong October numbers. While there were falls, the count was stronger than expected, especially for Sydney.”

He added: “Just like this time last year, vendors are keen to sell before Christmas but in greater numbers. Perhaps it is due to the lockups of July to October.”

Mr Christopher also said that the strong count could also be due to more vendors believing that Sydney and Melbourne are currently at their peak levels.

With recent auction data showing volumes at record highs, Mr Christopher said that agents could expect the Christmas and New Year period to be busy. “Either way, selling activity remains very strong and will remain very strong right up to Christmas,” he said. 

Commenting on the supply and demand dynamics, Mr Lawless said that the new stocks coming into the market are easing FOMO among buyers.

“Fresh listings are being added to the market faster than they can be absorbed, pushing total active listings higher. More listings imply more choice and less urgency for buyers,” he stated. 

Mr Lawless expects inventory levels to continue to normalise into 2022 and lead to market dynamics gradually shifting from favouring sellers, which could provide buyers with some additional leverage during negotiations. 

“As listings rise, we are also seeing a subtle softening in vendor metrics such as the median number of days it takes to sell a property and auction clearance rates,” he noted.

Auction markets

After months of property listing shortages, home buyers in Sydney are spoiled for choice with listings in the lead-up to Christmas, with bidder competition easing as more properties go under the hammer and buyer fatigue sets in. 

New figures from Ray White showed that auctions in the city drew an average of 6.5 bidders in November, with only 3.3 buyers making offers on the auction floor. This is the lowest number since last November, and down from a peak of 4.5 active and 9.4 registered bidders in July, when the city was in lockdown.

Ray White chief economist Nerida Conisbee said that the observed surge in the number of homes being listed in the market post-lockdown was the main reason for eased auction competition and slowing price growth. 

Ms Conisbee also added that the level of savings people directed to property had also been expected to fall as cities and borders reopened. 

“The other thing we’re seeing is that days on market are on the rise, which is another indicator that buyers are being a little more cautious and sellers are holding out for higher prices,” Ms Conisbee said.

Meanwhile, figures from Domain also showed auction clearance rates softened in Sydney throughout November as buyers regained a little power in a market now offering more stock for sale than it has in months.

Sydney’s clearance rates recorded a drop from 75.9 per cent to 70 per cent in November, to hit a 12-month low. This is the second month in a row of slowing clearance rates as more homes hit the market, giving buyers more choice, according to Domain. 

In November, the city recorded the highest number of auction listings since Domain records began in 1995, with 5,549 properties going under the hammer during the month.

And there are plenty more auctions to come before the end of the year. Domain figures show Sydney is set to have at least two more Super Saturdays – of 1,000-plus auctions – ahead of the market’s summer shutdown. 

The increased volume and reduced competition in the market have resulted in Sydney’s median auction house price declining 3.6 per cent over the month to $1.95 million. However, the figures are still up 21.9 per cent over the year.

Domain chief of research and economics Nicola Powell said the decline in median auction house price indicated that home buyers are showing signs of fatigue in the face of skyrocketing prices. 

It also shows buyers’ budgets are constrained by the extreme price growth over the past year, she added. 

“The sentiment of a buyer is changing, they’re more wary of not overpaying for a home,” Dr Powell said.

“There’s this light at the end of the tunnel for buyers – they know if they miss out on this home they don’t need to go gung-ho on a single property at auction … The next opportunity is around the corner.”

If you want to be in the know about Australia’s auction market, follow our weekly updates in our News section

Vacancy rates 

Domain data showed vacancies increased marginally in Sydney, from a rate of 2.2 per cent in October to 2.3 per cent in November. However, this was still the city’s second-lowest rate (after October) in over three years. 

Areas with the highest vacancy rates are Ku-ring-gai (3.7 per cent), CanterburyCanterbury, NSW Canterbury, VIC (3.5 per cent), AuburnAuburn, SA Auburn, NSW (3.3 per cent), Pennant HillsEppingEpping, VIC Epping, NSW (3.2 per cent), Rouse Hill – McGraths Hill (3.2 per cent). 

Meanwhile, the areas with the lowest vacancy rates are Camden (0.3 per cent), Wyong (0.4 per cent), SutherlandMenaiHeathcoteHeathcote, NSW Heathcote, VIC (0.4 per cent), Hawkesbury (0.4 per cent), and RichmondRichmond, SA Richmond, VIC Richmond, NSW Richmond, TAS Richmond, NSWWindsorWindsor, NSW Windsor, VIC Windsor, QLD (0.4 per cent). 

Sydney had been the hardest hit by the pullback in demand from international students, migrants and visitors during the pandemic. However, as borders reopen, Domain said the city’s market might be about to turn a corner. 

Dr Powell said that as state and international borders reopen and economic conditions improve, rental demand in Sydney would likely climb, reducing the already limited proportion of vacant homes in many cities and pushing prices beyond already record highs. 

She explained that the tight rental conditions could make it harder for lower-income earners to be considered for properties. “In that kind of market, a landlord will want to pick the crème de la crème of tenants … a landlord can be choosy, more particular of whom they’re letting in, and that makes it really tough, particularly for somebody on a lower income, or perhaps in a less stable job,” she said.

Rental market

CoreLogic’s data showed that Sydney’s rental market continued to climb in November. On an annual basis, both house and unit rents rose by 10.2 per cent and 6.8 per cent, respectively. 

Gross rental yields have continued to diminish during the month, falling to a record-low nationally of 3.24 per cent. 

Sydney continued to lag behind its capital city peers, showing the lowest rental returns of 2.4 per cent due to lower rental growth relative to a high rate of capital gain.

“Gross rental yields reached a new record low across every capital city and broad rest-of-state region in November implying a growing imbalance between the costs associated with owning a home versus renting a home,” Mr Lawless said. 

He continued: “With mortgage rates also extremely low, such a small yield profile is not overly concerning at the moment, however as investment activity increases along with the growing potential for higher interest rates, we could see more investors once again relying on a negative gearing strategy over the medium to long term.”


Looking at the big picture, there are a number of headwinds that will continue to affect Sydney’s price growth in the coming months. 

While advertised inventory remains low in the city, a surge in new listings topping up low stock levels is finally meeting the huge buyer demand for property seen throughout 2021. As a result, CoreLogic points out that “vendors may need to adjust their pricing expectations if homes take longer to sell”.

There is also a growing buzz about the RBA raising the cash rate earlier than 2023. Additionally, fixed term mortgage rates are rising, which could act as a disincentive for some buyers.

These factors, in combination with poor affordability, APRA’s tightening of lending conditions and the potential for more of those restrictions to come, and means buyers with reduced borrowing power will be likely to pay less for property, the research firm noted. 

On the other hand, there are some positive signs when it comes to future growth. For one thing, the opening of international borders is seen to drive the demand for Sydney housing. 

Additionally, while fixed rates are rising, variable mortgage rates are less inclined to rise until the cash rate lifts, which is still expected to be more than a year away. Low mortgage rates will continue to support housing demand, but probably not to the same extent as seen through 2021, according to CoreLogic. 

And while interest rates are set to rise, they’re still at extremely low levels, and that won’t change drastically in the near future.

Also, with such a high percentage of Australians now vaccinated, market disruptions caused by COVID are looking less likely, CoreLogic noted.

Across NSW, the state government has recently reported that 94.7 per cent of people aged 16 and over have received the first dose of a COVID-19 vaccine, and 92.8 per cent are fully vaccinated.

With all this said, Mr Lawless believes that the NSW capital has room to further expand, albeit at a milder rate. 

“The market still has somewhere to go before prices start falling. The cue for the market to go down is when rate rises happen,” Mr Lawless said.

“My guess is through 2022, the rate of growth will gradually ease off but prices will probably still rise,” the expert concluded. 

For more insight into the NSW capital’s growth prospects, check out our article on which Sydney suburbs are tipped for growth in 2022.

If you’re a first-time buyer looking to enter the real estate market next year, check out Smart Property Investment’s brand-new white paper, Why 2022 is the right year to invest for beginners


Property market update: Sydney, November 2021
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