The Blue Mountains Property Market Update 1st Half 2024
In Q4 2023, Blue Mountains recorded a median house price of $864,500, and a median unit price of $675,000. This represents annual (Q4 2022 – Q4 2023) growth of 0.5% for houses and 4.2% for units. During this time total house sales decreased, by -8.4% (to 328 sales), however increased by 10.5% (to 21 sales) for units. This suggests an undersupplied house market and a highly demanded unit market. Confidence has returned to Blue Mountains, as cash rates start to stabilise. House prices have seen limited growth in the past 12 months, suggesting that now is an ideal time for buyers to enter the market, before further price growth.
Average vendor discounts between Q4 2022 and Q4 2023 have tightened significantly, to a discount of -3.3% for houses and -4.4% for units. These are the tightest average vendor discount recorded in the past 18 months. Market conditions in The Blue Mountains still favour buyers, as sellers are willing to sell below the initial listing price, but this is now shifting more towards a seller’s market. Buyers wishing to benefit from a discount must act fast.
House rental yields in Postcode 2777 was 3.0% in December 2023, slightly higher than Sydney Metro (2.8%). in the 12 months to Q4 2023 median house rental price increased by 8.2%, to $595 per week, alongside a -11.4% decline in the number of houses rented (to 867 rentals). This suggests a rental undersupply, with more rental houses needed. With a much lower entry price than Sydney Metro, the Blue Mountains area is attractive for investors.
4+ bedroom houses have provided investors with +7.7% rental growth annually, achieving a median rent of $700 per week.
Springwood (postcode 2777) recorded a vacancy rate of 0.4% in November 2023, below Sydney Metro’s 1.7%. Vacancy rates have fluctuated in the past 12 months, due to the level of investors opting in/out of the area – mirroring cash rates fluctuations. However, a 0.4% vacancy rate is still significantly below the Real Estate Institute of Australia’s healthy benchmark of 3.0%, indicating quicker occupancy of rental properties.
