There’s no doubt that the Delta strain is impacting the local property market but maybe not in the way you may have imagined.
We take a look at the seven trends emerging – and being sustained – during Sydney’s latest lockdown and what it means for buyers and sellers.
1. The real estate market is showing great resilience
Our local property market has shown enormous resilience over the past 18 months, as we noted in our most recent property report. In the face of a one-in-100 year pandemic, it barely missed a beat. Prices dipped only slightly between March and October 2020 before surging to all new highs in early 2021. By the end of June 2021, as we entered the current lockdown, the median Sydney dwelling price was 15.4% higher than it was at the beginning of the year, according to CoreLogic’s National Home Value Index.
And despite the lockdown, prices kept rising. Over July 2021, the median Sydney dwelling price lifted another 2.0% to be 17.4% higher than on 1 January 2021. Houses – as opposed to apartments – have performed better still, with the median price lifting 2.1% over July and 20.9% since the start of the year.
That’s an incredible result and a real vote of confidence in our city’s property market, even in the face of great adversity.
2. Other property data is positive too
Throughout the lockdown, we’ve continued to see healthy auction clearance rates. Across Sydney, we registered a clearance rate of over 80% in early August. Here, in our area, the rate was an even healthier 86.4%.
While we’re obviously not allowed to hold physical auctions, we’ve pivoted and they have simply moved online. Open homes are one-on-one by appointment only, but we’re seeing strong interest and a large volume of buyer enquiries, with demand continuing to far outstrip supply.
This indicates that the pattern of rising prices may play out for some time yet.
3. Buyers are still missing out on properties
Ku-ring-gai’s property market has been competitive over 2021 and prices are rising in many suburbs, just as they are across Sydney as a whole. For example, according to realestate.com.au, median house prices in Killara rose from $2,867,500 in June 2020 to $3,660,000 in June 2021. That’s a rise of $792,500 over a year – or $15,240 a week.
To work out whether you’re paying too much (or offering too little) monitor recent sales results, rather than asking prices. We’ve found that the level of interest in some properties has been so high that we’ve had to revise price expectations upwards during the campaign.
Securing the right home at the right price can mean missing out on a few along the way. Doing your homework will ensure you are prepared, and ready to act when the right property comes along. And, when it does, act fast to beat the competition.
4. Price rises are part of a global trend
It’s interesting to note that despite COVID, a variety of different property markets across the globe have also experienced price rises. From NZ, to the UK, US, Canada and Northern Europe there have been rapid price rises across the housing market in the past 18 months.
A lot of this can be attributed to the low interest rates in these markets and, again, demand outstripping supply, as people look to create a base during a time of uncertainty.
5. After a lockdown, there typically comes a rebound
After last year’s lockdown, we saw pent up demand collide with limited supply to push prices rapidly upward. This is a phenomenon we’ve witnessed across global markets whenever lockdowns finish as well as those closer to home, such as Melbourne. When the current restrictions come to an end, we believe we’re likely to see this happen again. After all, the same fundamentals that were underpinning the market at the start of this year – such as low interest rates and lack of stock – are unlikely to disappear anytime soon. We also note that the demographics of our area – with a large percentage of people working in professional or managerial roles – mean that it is likely to be less affected than some when it comes to potential job losses.
6. Apartments and houses are increasingly two separate markets
Property prices have not grown in unison over the past six months. In the first seven months of 2021, Sydney’s median unit price experienced a growth rate of 10.0% – less than half the rate of growth in Sydney’s median house price.
Lower migration levels, higher vacancy rates and fewer active investors in Sydney have been acting as a brake on price growth in the mass apartment market and this is probably the one part of the market where demand isn’t way higher than supply.
Then again, some parts of the unit market have been outperforming the average. This is particularly true of the luxury apartment market, where downsizers are active. In fact, downsizers are becoming a real and growing force in our local property market and helped to push Turramurra’s median apartment price up 12.0%, in the five months to May 2021.
7. Renovations remain popular
With everyone forced to spend time at home, more people than ever seem to be finally getting round to those long-awaited renovations or home improvements.
We saw this trend emerge in 2020, when it was spurred on by the federal government’s HomeBuilder stimulus grant. Now, it seems that it’s here to stay with homeowners keen to make their property more comfortable. Many are choosing to do a full upgrade, while others are simply looking to remodel the kitchen or reconfigure their layout to make it easier to work from home.
The result is that when properties do eventually hit the market, an increasing number of them are likely to be larger and more ‘specced out’ than they would have been.
If you’d help buying or selling in the Ku-ring-gai property market, get in touch today.