Buying Sydney property becoming more challenging as housing shortage worsens

Near insatiable buyer demand has worsened an already severe housing shortage across much of Sydney.

Listings data showed the Harbour City had about 10 per cent fewer homes up for sale in June than it did at the end of the first lockdown last year.

It’s a significant drop considering nervous homeowners had been pulling their homes from the market or delaying sales last year due to uncertainty over the shrinking economy at the time.

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Figures released by SQM Research showed there were also about 650 fewer homes for sale in June than in May, with the research group attributing the drop to there being “more buyers than sellers”.

The scant supply of available housing, at a time of low interest rates, has been one of the biggest drivers of record property price growth as it has forced buyers to bid up prices to secure the homes they like.

This trend has been particularly strong in the detached house market, where CoreLogic data showed prices increased nearly 20 per cent over the 2020/21 financial year.

It has become common for some suburbs, especially those on the northern beaches, to have less than five listings or no available houses for sale at all.

SQM Research director Louis Christopher said buyers were snapping up old listings faster than new listings were becoming available.

“We have also seen a another large fall in old listings this month, indicating old stock is being sold and new property listings aren’t offsetting this fall,” Mr Christopher said.

“This highlights there are more buyers than sellers … It also suggests the market remains strong despite the new outbreak in Covid-19 cases and the end of Job Keeper and Home Builder earlier this year.”

Mr Christopher said he expected strong price growth to continue through 2021.

“Households are awash with cash, the jobless rate is falling, so we’d expect house price growth to remain strong with interest rates so low,” he said.

“However we note the current pace of the housing market is not sustainable over the long term.

“And we also note the current worldwide housing boom, strongly suggesting this strong upturn in Australia has been driven largely by ultra-low interest rates and easier lending standards.

“In time, there will be a change in these monetary settings which will trigger a downturn.”

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