The NSW property market is back on the boil as buyers return to the market to take advantage of falling house prices, a new report shows.
Real Estate Institute of NSW (REI) figures show there was a decline in median house and unit prices in the September quarter in Sydney and NSW overall.
The median house price in Sydney fell by 1.5 per cent to $520,000 while Sydney unit median sale prices fell by 2.3 per cent to $357,000.
As a result, Sydney house sales rose 32.2 per cent and unit sales jumped by 22.2 per cent.
REI president Rowen Kelly said the NSW market was regaining strength due to an increasing demand for property as housing became more affordable.
"The current property market has moved on from the decreasing sales volumes trend of the past year," he said.
"The good news is that we have returned to a buyers' market in NSW, which will continue on the back of soft prices generated by the increasing range of property becoming available."
In NSW, the median sale price of a house had declined by 1.7 per cent to $471,000 for the quarter, however sales volumes rose by 19.6 per cent to 21,595 in the same period.
Mr Kelly said these latest figures show that the state's decision to abolish a vendor tax on investment properties resulted in large numbers of both established home buyers and first home buyers returning to the market.
"The direct effect of the vendor tax's abolition has been property investors having the opportunity to sell their asset without penalty and thereby increasing the stock of available of properties on the market," he said.
Mr Kelly said it was clear that NSW's return to an equal footing with other states, due to the combined of effect the vendor tax abolition and the return of the land tax threshold, was having a positive impact on the demand for property.
The NSW Government's unpopular 2.25 per cent tax on the sale of investment properties was scrapped in August.
The Government also reinstated a new tax-free threshold for land tax on investment properties just one year after it was abolished.
Mr Kelly noted that the latest Australian Bureau of Statistics figures show first home buyer demand rose of 10.1 per cent in August.
The REI report also showed that the most affordable area in Sydney is Campbelltown, while the highest median house price recorded across Sydney in the quarter was in Mosman.
