2023-10-23-莱坊-Sydney_New_Apartments_Insight_Q3_2023_8页_1mb

Sydney New Apartments Insight Summary (Q3 2023)

Core Content Overview

This report provides an analysis of the high-density residential development and new apartment market in Greater Sydney, focusing on site sales, construction costs, apartment prices, and developer activity. It also outlines forecasts for the next few years.

Developer Activity

• High-density site purchase share: 87.3% of residential development sites in Greater Sydney were purchased for high-density development in the year to June 2023, up from 79.8% five years earlier.
• Building approvals: 22,232 apartments were approved in Greater Sydney between June 2022 and June 2023, representing a 5.9% increase.
• Developer appetite: Despite the increase in approvals, the volume is still significantly lower than the 36,583 apartments approved in the same period five years ago.

Cost of Construction

• Annual increase: Construction costs in Greater Sydney rose by 5.6% in the year to June 2023.
• Standard finish: Estimated costs for apartments with a balcony ranged from $2,850/sqm to $3,385/sqm (plus GST) in 2022.
• Prestige finish: Costs for high-end apartments were estimated at $3,745/sqm to $4,400/sqm.

Established Apartments Performance

• Sales volume: Sales of established apartments increased by 19.8% in the June 2023 quarter, reaching 9,147 units.
• Annual sales volume: Annual sales volume decreased by 23.9%.
• Days on market: The average days on market for established apartments was 80 in the June 2023 quarter, up from 90 one quarter earlier.
• Capital values: Median capital values for established apartments fell by 0.7% over the year to June 2023, but increased by 2.7% in the last quarter to a median of $774,000.

Rental Market

• Gross rental yields: Increased by 19 bps to 4.58% over the June 2023 quarter.
• Rents: Rents rose by 8.1% in the quarter and 27.6% over the past year, with a median rent of $670 per week.
• Vacancy rate: Total residential rental vacancy in Greater Sydney was 1.5% at the end of June 2023, with 2.1% in the Inner Suburbs, 1.5% in the Middle Suburbs, and 1.5% in the Outer Suburbs.

New Apartments in Greater Sydney

• Site sales volume: Total volume of high-density residential sites sold in the year to June 2023 was $2.34 billion, a 29.2% decrease from the previous year.
• Site prices: High-density development site prices fell by 2.1% over the year, with a -0.8% change in the June 2023 quarter.
• New apartment prices: New apartment prices increased by 7.4% over the past year.
• Forecast: New apartment prices are expected to rise by 9% in 2023, 7% in 2024, and 4% in 2025.

New Apartments in Prime Regions

• Annual change in site sales volume: -13% at the end of June 2023.
• Site prices: -0.1% change over the year, with a 0.9% increase in the June 2023 quarter.
• New apartment prices: Rose by 9.9% over the past year.
• Forecast: Prices are expected to increase by 8% in 2023, 6% in 2024, and 5% in 2025.

New Apartments in Inner Suburbs

• Annual change in site sales volume: -31% at the end of June 2023.
• Site prices: -0.5% change over the year, with a -0.7% decrease in the June 2023 quarter.
• New apartment prices: Increased by 9.4% over the past year.
• Forecast: Prices are expected to rise by 11% in 2023, 10% in 2024, and 8% in 2025.

New Apartments in Middle Suburbs

• Annual change in site sales volume: 3% at the end of June 2023.
• Site prices: -3.7% change over the year, with a -0.7% decrease in the June 2023 quarter.
• New apartment prices: Increased by 6.1% over the past year.
• Forecast: Prices are expected to rise by 7% in 2023, 6% in 2024, and 3% in 2025.

New Apartments in Outer Suburbs

• Annual change in site sales volume: -19% at the end of June 2023.
• Site prices: -11% change over the year, with a -2.7% decrease in the June 2023 quarter.
• New apartment prices: Increased by 1.3% over the past year.
• Forecast: Prices are expected to rise by 4% in 2023, 3% in 2024, and 1% in 2025.

Key Definitions

• Major sites: Sites with a raw value threshold of $2 million or more (except Sydney and Melbourne, which are $5 million or more).
• High-density: Projects with 4+ storeys.
• Prime (luxury) residential property: The top 5% of each market by value.
• Prime regions: Includes specific postcodes in Inner Sydney, Eastern Suburbs, Inner West, Lower North Shore, Upper North Shore, Northern Beaches, and Southern Beaches.
• Currency: All figures are in Australian Dollars (AUD) unless stated otherwise.

Forecast Summary

Conclusion

The new apartment market in Greater Sydney is showing signs of recovery, with increased developer activity and rising prices in most regions. However, site values have declined in recent years, particularly in the inner suburbs, and construction costs have risen. The rental market remains stable, with low vacancy rates and increasing rents. The NSW government's push for higher density around transport hubs may further influence the market in the coming years.