October 15, 2021

Sydney property prices outperform the nation


Sydney Residential Property price growth has outpaced the national weighted average price growth by 2.5%, leading all other capitals across Australia.

According to CoreLogic, the median house value is $1.3m, whilst units have increased to $825,000 in Sydney. House price growth was 19.3%, substantially outperforming units (8.1%) over FY21 (ABS Data).

We expect this divergency to retrace to the historical trend of mean reversion in the short to medium term. It is expected this will occur as the borders open allowing investors and migrant purchasers to re-enter the market. The residential property price index jumped 8.1% in 4Q21 alone.

ABS data released 14 September 2021

Price growth supports development feasibility and assists in offsetting price inflation in wages and materials seen across the construction industry.

The Partners Fund has two projects under construction in the New South Wales residential sector. Castle Residences, a mixed-use development in the heart of Sydney’s CBD with 92 luxury apartments on the upper levels and Point Frederick, a 100-unit development in East Gosford. Terms have also recently been signed on a $26m investment for a land subdivision in a coastal town south of Ballina.

This week, a $109m loan for an A-Grade commercial office development in Melbourne’s fringe was successfully refinanced by one of the major banks. The settlement of this investment supports our investment strategy of funding high quality office developments in premium locations which we have identified as having intrinsic demand but are yet to be preleased.

Secondly, a $31m loan for a residential development in Melbourne was refinanced to cater for an extended completed date of July 2022. The loan has been repriced to compensate for longer duration.

There have been no changes to the agricultural portfolio this week.

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