The Property Market in 2024 into 2025

A Look Back at Sydney and NSW's Property Market in 2024

The NSW property market, particularly Sydney, showed remarkable resilience throughout 2024. Highlights from Domain’s Year in Review include:

• Sydney House Prices: A 4.2% annual rise in median house prices reflected strong demand and limited supply in highly sought-after suburbs.
• Unit Prices: Unit prices grew by 2.8%, offering a more accessible entry point for both buyers and investors.
• Regional Growth: Areas like the Central Coast, Newcastle, and Wollongong experienced growth of up to 5.5%, driven by a growing preference for lifestyle-oriented properties and affordability compared to Sydney.

However it is to be noted that in the later part of 2024, supply was and still is currently fairly high, which is placing downward pressure on house prices throughout NSW. 

Metropolitan vs. Regional Market Trends

Data from Realestate.com.au revealed clear distinctions between NSW’s metro and regional markets:

• Sydney Metro: Inner-city suburbs such as Darlinghurst, Paddington, and Surry Hills remained highly desirable, with demand outweighing supply.
• Regional Hotspots: Locations like Newcastle, Wollongong, and the Central Coast gained popularity for their affordability, thriving local economies, and appealing lifestyle options.
• Faster Sales: Properties moved quickly this year, with the average days on the market dropping from 35 to 28, highlighting a more dynamic and active market.

Sydney’s Rental Market in 2024

The rental market in Sydney maintained its strength and competitiveness throughout the year:

• Rental Yields: Yields in metropolitan areas remained stable, ranging from 3.5% to 4.2%.
• Tenant Preferences: Features like energy efficiency, dedicated home office spaces, and easy access to public transport saw rising interest.
• Rent Prices: Average weekly rents ranged between $850-$1,100 for houses and $650-$850 for units, showcasing the high demand for rental properties.

Key Updates to Tenancy Laws

The NSW government introduced significant changes to tenancy laws in 2024:

• Stronger Protections: New regulations enhanced fairness for both landlords and tenants.
• Sustainability Guidelines: Encouraging energy-efficient features in rental properties aligned with broader environmental goals.
• Updated Notice Periods: Adjustments to rules around inspections and lease terminations provided clearer expectations for all parties.
• Limit to Rent increases of once per year: Once every 12 months for a rent increase upon the same tenant (This law is different to QLD’s new rule, where the rent increase is placed on the property to limit a rent increase to once a year, no matter how many tenants sign a lease within that 12 month period).

Looking Ahead to 2025

Based on insights from Domain and Realestate.com.au, here’s what the NSW property market may hold in 2025:

• Steady Growth: Sydney property values are expected to rise by 3-4%, while regional areas may see higher gains as more buyers explore suburban and regional options.
• Focus on Sustainability: Demand for energy-efficient and environmentally conscious homes will continue to grow.

Shifting Investment Trends: Properties offering home office spaces, sustainability features, and proximity to public transport will remain attractive to investors.

• Adapting to Change: The market will continue to evolve with the rise of remote work, digital property management solutions, and increased migration.

Although we are expecting a slight rise throughout the year in the Sydney market, the current pressure on the Australian dollar means we could be importing inflation due to more currency units required to purchase the same amount of goods and the falling Aussie could also potentially halt the first rate cut, which we are all holding our breath and hoping for in the first quarter of 2025.

This could further impact housing prices and currently there is more supply than demand, which is hurting sellers at this time.

More potential changes to tenancy laws as follows:

• Rent increases: Rent increases are limited to once per year for all leases. There is also a 12 month cap on rent increases, meaning that landlords cannot increase rent within the first 12 months of a tenancy. 
• Extra charges: Extra charges at the start of a tenancy, such as background check fees and tenancy agreement preparation fees, are prohibited. 
• Evictions: Landlords must provide a valid reason to end a tenancy, and significant penalties may apply for misuse of these grounds. 
• Pets: It will be easier for renters to keep pets in their homes. 
• Payment rules: Rental payment rules are improved. 
• Background checks: Renters cannot be asked to pay for background checks. 
• Payment methods: Renters will have a free and convenient way to pay rent.

James Avenue: Your Trusted Partner in Property

As we enter 2025, James Avenue remains committed to supporting the Sydney and NSW community. Whether you’re buying, selling, or investing, our team is here to provide expert advice, innovative solutions, and personalized service to help you achieve your property goals.

Please do not hesitate to reach out to us if we can be of service to you.