Future market outlook for Ku-Ring-Gai

2019 Q3 Market Analysis

Future market outlook for Ku-Ring-Gai

National Outlook

 

Changes in the housing market have impacted most of Australia in the past 12 months. Decreasing median prices in the capital cities, the federal election and uncertainty around taxation reform have impacted buyers’ confidence in the first half of 2019. Melbourne and Sydney may have reached their ‘troughs’ with prices increasing only 0.2 and 0.1 per cent (according to the Sydney Morning Herald) respectively in the month of July.

 

On the other hand, rate cuts in June and July by the Reserve Bank of Australia have boosted demand while revised serviceability assessments have made loans slightly easier to attain (ABC 1 August 2019). Interest rates remain in 1 per cent at the time of publication.

 
 

Dwelling type demand

 

Ku Ring Gai has a smaller range of property types compared with some other council areas. With a total of 1135 houses and 581 units sold in the past 12 months, four-bedroom dwellings are the most popular. Detached homes represent the largest portion of sales, with units the second most popular option. Sales of four and five bedroom homes are dominant in this region, compared with the popularity of three-bedroom homes in other regions.

 

 


 


Houses

 

Market cycle position

 

Median prices in the past decade for Ku Ring Gai have experienced volatile changes. From 2007 to 2015, values increased by 50 per cent, followed by a gradual slow down in price growth bottoming at 0 per cent in 2018. In 2019 the local housing market experienced its’ first decline in 10 years with prices crossing the red line into the negative region with yearly change of -1 per cent. HtAG forecast a marginal median price decline for houses within the next two years. However, considering overall changes to property values in the last decade, Ku Ring Gai median house price has increased by 76 per cent.

 

 

Heatmaps

 

With median price growth entering the negative territory in 2019, Ku Ring Gai has experienced a range of price changes in the past 12 months. The heatmaps tab within our set of available tools illustrates the annual median price change for a specific area, in this case Ku Ring Gai, for 2018 to 2019.

 

Price changes for houses in Ku Ring Gai range from negative 3.2 to positive 1.5 per cent for the past 12 months. East Killara experienced the strongest growth at 1.52 per cent while Turramurra experienced a decline of 3.17 per cent. Given these changes, it is important to note that some suburbs may have characteristics such as a low number of property sales, which tends to produce low confidence medians. In these situations a single discounted sale may skew the suburb’s overalll median price. At a minimum an average of 10 sales is needed for a suburb to exhibit an accurate measurement of price median values.

 

Warrawee, Pymble and East Lindfield experienced almost neutral median price changes, between minus 0.67 and 0.65 per cent. Given the market cycle position, we can expect the percentage growth to increase slightly or stay the same across the region.

 

 
 

Individual Sales

 

The overall trend shown in the heatmaps tab shows a range of sale prices spanning from $1,100,000 to $3,100,000, shown in red, orange, yellow, light and dark green. The suburbs of Turramurra, South Turramurra, West Pymble, and Killara show a dominant red heatmap representing sale prices of $1,100,000 to $1,500,000. The central areas of Pymble, Gordon, Killara, Lindfield and Roseville show a light green to dark green heatmap representing sale prices of $2,200,000 to $3,100,000. The north east suburbs of North Turramurra, St Ives, East Killara and East Lindfield have a mixed range from orange to dark green.

 

 


 


Units

 

Market cycle position

 

Units in Ku Ring Gai have seen a 52 per cent increase from 2007 to 2015, followed by a gradual slowdown in growth bottoming at just 1% in 2019. HtAG forecasts a 7 per cent increase in the median price for units within the next two years.

 

 
 

Heatmaps

 

Most of the suburbs in Ku Ring Gai have experienced some positive growth, up to nine per cent, in the past year. However, St Ives experienced a reduction of 2.04 per cent in the value of units. St Ives has had only five sales this quarter which is commonly a poor indicator of median price confidence.

 

The highest growth area with dark green is Lindfield with price growth of 9.42 per cent. There have been only three sales this quarter, however this number is likely to duable by the time the quarter is closed. Given the market cycle position, we can expect the overall value of units to increase for most of the Ku Ring Gai area.

 

 
 

Individual Sales

 

The overall trend shown in the heatmaps tab shows a dominant red to yellow range, representing sale prices from $500,000 to $1,200,000. The number of dots in the heatmap is limited due to lower numbers of sales of units compared with other council areas. The activity is also concentrated in the central area. Warrawee, Turramurra and Pymble have more dominant red heatmaps representing $500,000 – $600,000 sale prices. Gordon, Killara and Lindfield have a array of red to dark green heatmap representing sale prices ranging from $500,000 to $1,800,000. However, there have been a relatively small number of sales within each colour bin.

 

 
 


 
 

Conclusion

 

The overall property market outlook for Ku Ring Gai shows mixed demand; houses will likely experience a minor decline in median price and units are set to continue exhibiting positive marginal growth. Two-bedroom units and four-bedroom homes are the most popular across the region. The area has experienced a range of price changes indicating a diverse mix of opportunity. There is stronger demand for properties in the central area while more expensive properties in the outer areas of the council area may experience a softening of sale price. Units across the LGA show strong demand, especially those in the central areas.

Trisha Harris
Trisha Harris
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