2024-02-02-莱坊-Sydney_Prime_Residential_Insight_Q4_2023_3页_766kb

Sydney Prime Residential Insight Summary - Q4 2023

Core Content Overview

This document provides a quarterly analysis of the Sydney prime luxury residential market, focusing on price growth, rental trends, wealth dynamics, and the economic and lending environment influencing the market.

Wealth Trends

• High-Net-Worth Individuals (HNWIs):

  • Sydney's HNWI population grew by 7.7% in 2022, reaching 482,946 people with net wealth over US$1 million.
  • This population accounts for 21.8% of Australia's total HNWI population, down from 22.7% five years ago.
  • It is projected to grow by 51.4% by the end of 2027, but still lower than the national growth of 71.1%.
  • Sydney's share of Australia's HNWI population is expected to be 19.3% by 2027.

• Ultra-High-Net-Worth Individuals (UHNWIs):

  • Sydney's UHNWI population increased by 7.8% in 2022, reaching 6,132 people with net wealth over US$30 million.
  • From 2017, the UHNWI population in Sydney has grown by 23.7%, though this is slower than the national growth of 31.3%.
  • Sydney's share of Australia's UHNWI population has decreased from 37.2% to 35.1%.
  • The UHNWI population is forecast to grow by 9.0% over the next five years, significantly slower than the national forecast of 40.9%.

Economic Environment

• New South Wales (NSW) Economic Growth:

  • Recorded 2.2% in 2022.
  • Forecast to taper to 1.4% in 2023, 0.3% in 2024, and 2.4% in 2025.

• Unemployment Rate:

  • Sydney's unemployment rate was 3.3% in September 2023, up by 6 bps compared to the previous year.

• Stock Market Performance:

  • The S&P/ASX 200 fell by 1.9% in Q3 2023, with a total decline of 8.8% over the past year.
  • Forecast to increase by 2.2% in 2023, 1.0% in 2024, and 6.0% in 2025.

• Company Profits:

  • Fell by 19.3% in 2022 after a 5.3% increase in 2021.
  • Forecast to fall by 0.3% in 2023, 4.2% in 2024, and then rise by 1.7% in 2025.

• Private Business Investment:

  • Grew by 8.0% in the year to September 2023, up from 6.8% the previous year.

Lending Environment

• Official Cash Rate (OCR):

  • Set at 4.35% in December 2023, up from 3.10% a year earlier.
  • Forecast to average 3.85% by the end of 2025.

• Mortgage Rates:

  • For owner occupiers:
    • 3-year fixed term increased by 51 bps to 6.56%.
    • Standard variable loan increased by 175 bps to 8.52%.
  • For investors:
    • 3-year fixed term increased by 64 bps to 6.65%.
    • Standard variable loan increased by 175 bps to 9.10%.

Sales & Price Performance

• Sales Volume:

  • 1,014 prime residential homes sold in September 2023, a 5% decrease from the previous quarter.
  • 3,696 annual sales in 2023, down 19% compared to the previous year.

• Days on Market:

  • The average days on market for a luxury home was 81 days in September 2023, up from 74 days in June 2023 and 62 days in September 2022.

• Price Growth:

  • Prime residential property prices increased by 4.2% in the year to September 2023.
  • Rose by 0.5% in the last quarter.
  • Forecast to increase by 3% in 2023, 5% in 2024, and 7% in 2025.

Rental Market Performance

• Rental Growth:

  • Prime residential rents increased by 4.5% in the September 2023 quarter.
  • Rose by 17.8% over the past year.

• Gross Rental Yields:

  • Increased by 27 bps to 2.40% in the year ending September 2023.

• Rental Forecast:

  • Prime rents are expected to rise by 18% in 2023, 12% in 2024, and 7% in 2025.

Sydney Prime Residential Forecast

Key Drivers of the Market

• Economic Growth: Expected to slow down in 2023 and 2024 but pick up in 2025.
• Unemployment Rate: Projected to rise slightly over the next few years.
• Cash Rate Target: Likely to remain elevated through 2025.
• Stock Market: Expected to show modest growth in the coming years.
• Company Profits: Anticipated to decline in 2023 and 2024 before recovering in 2025.

Summary of Main Points

• Sydney's prime luxury residential market is experiencing strong price and rent growth, driven by pent-up demand.
• The HNWI population in Sydney is growing, though at a slower rate than the national average.
• Economic conditions in NSW and Sydney are expected to slow down in 2023 and 2024 but recover in 2025.
• Mortgage rates have risen significantly, affecting both owner occupiers and investors.
• Rental yields have increased, indicating improved investment returns.
• The rental market is forecast to continue its growth trajectory, with the highest expected increase in 2023.

Key Figures

• -19% in Sydney prime residential sales volume compared to a year ago.
• 4.2% annual price growth in Sydney's prime residential market.
• 17.8% annual rental growth in Sydney.
• +8 pts in business conditions index points in September 2023.
• 8.0% annual growth in new private business investment in Sydney.