Sydney’s Upper North Shore property market has stayed strong over the first half of 2020, even as Australia enters its first recession for almost three decades.
We look at the suburbs and property types that are performing well and explore why this is the case, as well as what to expect from the remainder of 2020.
Market data shows the resilience of Sydney property market
CoreLogic’s market data shows that, as a whole, Sydney property prices have been slowly declining over the past few months. The median dwelling price was down 0.9% in July. This follows on from an 0.8% fall over June.
While this may sound like grim news, the reality is that property prices have been holding up remarkably well since the pandemic first hit. The median Sydney price is still 13.3% higher than this time last year. And, it should be remembered, that earlier this year, some commentators forecast that property prices would quickly crash.
In part, this hasn’t happened because low stock levels mean there’s still considerable competition for many properties that go to market. In fact, May 2020 saw the fewest properties listed for sale around Australia on record.
It’s also because low interest rates and generous bank policies on mortgage freezes mean that people haven’t yet been forced to sell their homes.
These factors are reflected in the auction clearance rate, which has been sitting between 60% and 70% for the past few months – usually the sign of a neutral market.
But on the Upper North Shore, the market has been performing more strongly. On 6 August 2020, the North Shore Times reported that the auction clearance rate was 81%.
Turramurra and Wahroonga houses the stand-out performers over 2020
Wahroonga houses have performed particularly strongly over the first part of 2020. In January 2020, the median Wahroonga house price sat at $1.925 million, according to realestate.com.au data. By August 2020 it was $2.12 million – a rise of 10.1%. Interestingly, most of this rise has occurred since March.
More impressive still has been the median price gain for Turramurra houses. This has lifted from $1.83 million in January 2020 to $2.105 million by August 2020 – a rise of 15%. In July 2020 alone, the median Turramurra price lifted $95,000.
That said, houses in all parts of the North Shore have performed well when compared to the Sydney average, as the table below shows.
|Suburb||Median House Price January 2020||Median House Price March 2020||Median House Price August 2020|
Source: Realestate.com.au Neighbourhoods
Apartment prices have been more subdued but tend to be flat rather than facing steep declines.
Factors counting in the Upper-North Shore’s favour
No matter how long the current recession lasts, our view is that the Upper North Shore should be better insulated from the potential impact than many parts of the city and country. After all, Upper North Shore residents are overrepresented in sectors such as professional and managerial services which haven’t been hit as hard by the pandemic as some other fields.
The RBA has also indicated that record low interest rates should persist for some time. This should help reduce the number of people facing mortgage stress and make it more likely that fewer people will be forced to sell their homes than in many recessions.
Rental market not as strong
Unfortunately, the rental market hasn’t held up quite as well as the sales market. In July, Domain reported that Sydney rents had recordest their sharpest drop (3.8%) in 15 years. Much of this has been the result of travel bans, which have led to fewer overseas arrivals needing accommodation.
That said, the overall Sydney rental market is highly fractured and the Upper North Shore hasn’t suffered as badly as some parts of the city.
The median weekly rent in our area fell just -2% in the year to 30 June 2020, compared to -7.7% in the City and East, -7.4% in the Inner West and -6.7% on the Lower North Shore.
What to expect over the remainder of 2020
Despite the current lockdown in Victoria, we’re hopeful that once the COVID-19 situation comes under control, confidence will return to the property market as a whole. When it does, we also expect the Upper North Shore to be a front runner in any price gains.
After all, the pandemic has made many Australians reconsider what matters to them in life. Our area, with its ample green space, great educational facilities and oversized blocks of land ticks so many of the boxes that people are looking for.
Download our June 2020 Ku-ring-gai market report if you’d like to know more about the North Shore property market.
If you’re looking to buy or sell on Sydney’s Upper North Shore contact our team today.