Property prices have been rising fast in Sydney over the past year, which has attracted residential real estate investors while pushing first home buyers out of the market. In fact, Australian Property Monitors recorded a staggering 15.1 per cent year-on-year rise for Sydney houses over the 12 months to December 2013. At the same time, units increased by a notable 10.9 per cent - the highest recorded in the country.
While these house price rises have helped investors to secure a better return on their properties, they have also had an effect on housing affordability, too.
Fortunately, property supply in Sydney's metro area could see a boost in the next few years, as housing approvals have increased dramatically over the December 2013 quarter.
Over July to December 2013, the Sydney metro region saw a 51 per cent rise in housing approvals compared to the previous six months. In the month of December alone, over 3,700 homes were approved in the region while over 3,400 were completed - providing buyers with more stock and cooling sharp price rises in the city.
"This is good news for homeowners, good news for our economy - now the fastest-growing state economy in the country - and great news for tradies and and builders in the construction industry," said NSW Minister for Planning and Infrastructure Brad Hazzard in a February 21 statement.
"More housing stock on the market means downward pressure on the price of new homes and more choice, which helps young families as they enter the housing market."
Higher demand for apartments
Interestingly, a majority of housing approvals in Sydney have been for apartments and units, indicating a preference for these types of properties by home buyers.
Figures from the Sydney Metropolitan Program showed that approximately three-quarters of all housing approvals Sydney were for multi-unit blocks in inner-city areas. Some of the regions that saw the highest numbers of apartments and units were Parramatta, Canterbury and Waverly.
"For the last 3 months of 2013 apartments were 73.2 per cent of all housing approvals and 71.1 per cent of all housing completions," said Urban Taskforce Chief Executive Chris Johnson in a February 24 statement.
"Clearly Sydney is swinging towards more urban apartments generally in inner city areas."
However, Mr Johnson noted that delays for the government's Urban Activation Precincts and planning act have had an effect on how fast these apartments and units can be built and the supply of land provided for construction.
