The Blue Mountains Property Market Update 2nd Half 2023
In Q2 2023, Blue Mountains recorded a median house price of $850,000, and a median unit price of $649,500. This represents annual (Q2 2022 – Q2 2023) softening of -8.1% for houses. However, on a quarterly basis (Q1 2023 – Q2 2023) median price softened at a slower rate, of -1.3%. This suggests cash rate hikes did translate into the market, but consumer confidence has started to slowly return. Sales declined in the past 12 months, by -12.5% for houses, while unit sales increased 13.0%, thus an undersupply in the house market. For those looking for a more affordable market, time is of the essence.
Average vendor discounts between Q2 2022 and Q2 2023 have widened to a larger discount of -5.1% for houses and -6.6% for units. Market conditions remain in favour of buyers, as vendors are willing to accept below the first list price. That said Q2 2023 average discounts are lower than Q1 2023, reflective of higher confidence. Those looking for more affordability need to act fast.
House rental yields in Postcode 2777 was 3.1% in June 2023, slightly higher than Sydney Metro (2.8%). In the 12 months to Q2 2023 median house rental price remained stable at $560 per week, alongside a 20.3% increase (to 284 rentals) in the number of houses rented. Average days on the market marginally increased, however still at a low 26 days in Q2 202. This indicates a strong rental market in Postcode 2777, which is more affordable market than Sydney Metro.
2-bedroom houses have provided investors with +2.2% rental growth annually, achieving a median rent of $470 per week.
Postcode 2777 recorded a vacancy rate of 1.5% in June 2023, slightly below Sydney Metro’s 1.7% average. Vacancy rates in Postcode 2777 have trended relatively steady over the past 12 months, although there was a spike between March and June 2023. This is potentially due to more investors capitalising on a tight rental market and re-entering. That said vacancy rates in the area remain under the Real Estate Institute of Australia’s healthy benchmark of 3.0%, indicating quicker returns.
