A modest rise in Sydney’s median house price, led by the city’s outer suburbs, signals better times may be ahead although lower transaction numbers remain a concern, the Real Estate Institute of NSW (REINSW) has reported.
According to September 2012 REINSW Property Profile report, the city’s median house price rose 0.4 per cent in the three months to September 2012 to $567,000.
REINSW CEO Tim McKibbin said while the rise is a positive sign, it is still 3.1 per cent down on the median house price recorded a year ago.
“The residential property market has stabilised across all sectors and the downward trend that we saw over the last 12 to 18 months has leveled out,” Mr McKibbin said.
“The greatest challenge we face is instilling that much-needed confidence.
“I monitor the various markets closely and while I believe at a pricing level we will not see significant corrections in 2013, I am concerned by the reduced level of transactional activity.
“The more affordable end of the residential market continues to be strong, with the new stock coming to market unable to satisfy demand. This is unlikely to change in the foreseeable future, as our population increases and the inhibitors to development remain.
“There will undoubtedly be challenges in the early part of 2013, but I believe that despite the current overly-cautious market, confidence will slowly return over the coming months.”
The REINSW figures revealed that the biggest falls in the median house prices were in the inner and middle suburbs of Sydney.
The median house price for inner city suburbs was $1,030,000, having dropped 2.8 per cent over the last 12 months. The middle suburbs told a similar story, falling 3.3 per cent over the same period to $720,000.
However, according to REINSW, the outer suburbs were the ‘good news’ story, having avoided the drops experienced in inner and middle parts of the city, with the median house price remaining stable at $460,000.
Median unit prices remained stable in September at $460,000, for the ninth consecutive month.
Auction activity dropped in the three months to September to an average of 379 properties each week, down from 446 per week in the June 2012 quarter. The clearance rate, however, rose to 62 per cent, up from 60 per cent in the previous quarter.
While most of the state’s regional areas saw stable prices, Orange bucked the trend, recording a 4.69 per cent on-quarter rise in the median house price.
“Both the Wollongong and Newcastle Local Government Areas (LGA) remained unchanged for the three months to September 2012, with median house prices of $440,000 and $385,000 respectively,” Mr McKibbin said.