Developers steady the ship for Paramatta unit pricing

Following last year’s falls in unit values, residential property prices in Parramatta are looking more stable according to a survey from Deloitte.

As the seasonal temperature started to drop in mid-2017, there were early signs of a cooling off in Parramatta’s apartment values. Figures released by Core Logic in March and April last year showed falls in median unit values of between three and five percent in the suburbs of Ermington, Dundas, Granville and the Parramatta CBD.

Although this dip may have caused alarm among property owners and developers in the Parramatta area, the downward trend seems to have been short-lived. By the time September rolled around, the median unit price for the winter quarter was sitting at $586,000, a 4.5% increase compared with the same period in 2016.

Putting developments on the back burner

In order to continue this modest annual price growth, developers are proceeding with caution and adjusting their output to match expected demand for residential property. According to the Parramatta Crane Survey published by Deloitte in December 2017, some residential developments are being put on hold in response to local market constraints. The Deloitte report takes the view that the slowdown will sustain unit values and we can also expect to see a stronger showing in the market from premium residential developments.

Steep drop in development approvals for units

Seen in the context of five consecutive months of falling median values in Sydney and a 40% drop in unit approvals from November to December 2017, the slowdown in residential development in Parramatta is likely to continue, in spite of unprecedented levels of infrastructure investment. The Deloitte report also suggests commercial property will be the hero of Parramatta development story for 2018.