It’s been a challenging year, but Sydney’s Upper North Shore property market has defied the worst predictions made in early 2020.
We take a look at the good news in Ku-ring-gai real estate over 2020.
Sydney property prices have increased
Six months ago we were reading dire headlines about a potential market crash, with declining auction clearance rates and one in nine mortgage holders taking up a home loan holiday. But, as 2020 draws to a close, it’s a very different story.
Earlier in 2020, CoreLogic’s market data showed property prices across Australia were falling, with a 2.1% drop in Australian home values recorded between April and September. Sydney’s median property price dropped 0.9% in July and then another 0.8% in June.
But six months can be a long time in property and the Sydney real estate market has since rebounded. CoreLogic’s national index shows that Sydney’s median dwelling price rose over November for the second month in a row, with Australian dwelling values up 0.8% over the month.
Sydney’s median dwelling price lifted 0.4% over the month, 0.3% over the quarter and 3.7% over the year. Not a bad result given an unprecedented pandemic.
Auction clearance rates have also increased since their April lows. On 28 November, Sydney registered a clearance rate of 72.5%, while the North Sydney and Hornsby region registered 68.9%.
On 3 December 2020, the North Shore Times reported that the auction clearance rate for the broader North Shore was an impressive 80%.
Consumer confidence has also been steadily rising over late 2020. Lending data from the Australian Bureau of Statistics for October showed the value of new loan commitments for housing grew for the fifth consecutive month, hitting levels not seen since before the GFC.
Record low interest rates are clearly having an impact but so is a recovering economy. After two quarters of negative growth, Australia’s economy grew 3.3% in the September quarter.
Many are optimistic about the future too, with SQM’s recently released Housing Boom and Bust Report 2021 predicting that Sydney prices may increase between 7% and 11% in 2021.
Rental market slowly picks up
The reality is that, while there are definite signs of improvement, the rental market hasn’t held up quite as well as the sales market.
Earlier this year we saw rising vacancy rates, which led to decreasing rents.
According to SQM Research, Sydney-wide rents have decreased for 7.2% for houses and 9.7% for units over the past 12 months, reaching $638 and $447 a week as of early December. However, there have been signs of stabilisation and improvement. Houses have fared better than units and actually experienced an increase of 2.3% over the week ending 4 December 2020. They have also increased 1.9% over the past month, and 1.7% over the last quarter. Units only lost 0.1% over the last week, and 0.6% over the month.
It’s also worth noting that the trend of rising vacancy rates and falling rents has been more pronounced in inner-city suburbs than in suburban areas like Ku-ring-gai.
Spotlight on the Upper North Shore
Here on the Upper North Shore, we’ve observed a definite rise in confidence, with more buyer and seller activity over the last few months.
In many ways, the market is behaving in a similar way to what we would expect at the end of any other year, with many buyers prepared to act decisively in their quest to secure a home before the Christmas holidays.
Data from realestate.com.au and realestateinvestar.com.au shows that this has been translating into some strong results in our local area.
Turramurra: The median house price lifted from $1.9 million in December 2019 to $2,181,750 in December 2020. Units have risen from $880,000 to $925,000 over the same period. The vacancy rate for rental properties is 1.52%.
Wahroonga: The median house price rose from $1,855,500 to $2,060,000 over the past 12 months and the median unit price also lifted from $840,000 to $865,000. The vacancy rate for rental properties is 1.4%.
St Ives: The median house price rose from $1,915,000 to $2,050,000 and units lifted from $882,500 to $1,050,000. The vacancy rate for rental properties is just 1.13%.
Killara: The median house price jumped an impressive 23%, rising from $2,502,500 to $3,080,000. Meanwhile, the median until price has remained stable all year at $890,000. The vacancy rate for rental properties is 1.95%.
We look forward to expanding on this analysis of the property market in 2020 in our forthcoming December 2020 Ku-ring-gai market report.
If you’re looking to buy or sell on Sydney’s Upper North Shore contact our team today.