At the start of 2020, the COVID-19 pandemic hit, bringing a level of uncertainty to the property market that we’ve never seen before.
Many feared the worst, expecting property prices to tumble. But shows the property market on Sydney’s Upper North Shore has coped remarkably well. We take a look at how COVID-19 has affected Ku-ring-gai real estate.
Sydney’s Upper North Shore
Despite dire predictions of tumbling property prices over 2020, the Upper North Shore housing market hasn’t experienced anything like a genuine downturn. On the whole, houses have fared better than units.
However, all properties have sold well, and we’ve seen strong demand from buyers.
For example, at the prestige end of the market, we recently sold 31 Ku-ring-gai Avenue, Turramurra for $10.125 million. This broke the record for the highest price ever paid at auction on Sydney’s Upper North Shore.
And Sydney’s auction clearance rate in late November is sitting at a very healthy 76%.
Global comparisons during COVID-19
Data released by Domain shows that new property listings in Australia, New Zealand, the UK, and the US all fell during each country’s respective lockdowns. Interestingly, the longer – or tougher – the lockdown, the greater the rebound when the lockdown ended. This was particularly true for Melbourne, which experienced one of the harshest lockdowns.
This phenomenon happens because lockdowns lead to pent up demand from people who have been waiting to transact but can’t buy or sell. The moment they’re able to do so, the floodgates open.
The state of the property market before lockdown also played an important role in allowing sales to take off again close to where they left off. A strong pre-lockdown property market should mean a strong post-lockdown market too.
This is something that clearly played a role here in Sydney, where we experienced a strong start to 2020.
Suburban growth comes at the expense of the inner city
One property trend that’s become evident since COVID-19 hit is that regional areas and the middle and outer ring suburbs of big cities have fared better than the inner city. That’s because the property market tends to be less reliant on investors and overseas arrivals. In fact, while vacancy rates in Sydney city have skyrocketed, in Sydney’s suburbs and regional areas, vacancy rates have fallen and prices have risen.
This includes the Upper North Shore, where the median price of a unit in Lindfield rose to $1.33 million – a 23.9% increase on the same time last year.
Factors that have impacted the property market during COVID-19
Thankfully our COVID-19 caseload in Sydney post-lockdown has been low enough for the majority of industries to keep going in some form, including property, and for economic activity to grow.
Beyond this, several contributing factors have been at play this year in keeping our property market buoyant.
For example, on Sydney’s Upper North Shore it’s important to note the impact of unusual market trends and emergency measures, including:
- Low stock or listing levels, which have continued throughout the year. These have challenged the usual cyclical patterns of the real estate market, as sellers take a wait and see approach to an uncertain economic climate. We’ve seen this across rentals and sales, and it certainly reflects the low consumer confidence, which we see improving as the year draws to a close.
- Record low interest rates, which have been cut twice this year, leaving the cash rate at 0.1% and making it ‘cheap’ to borrow money for a home loan.
- A mortgage freeze or home loan holiday was taken up by nine percent of Australian mortgage holders accounting for $160 billion as homeowners took a conservative approach to an uncertain economic future and rising unemployment. As a result, we’re pleased that we haven’t seen many forced sales. These six-month mortgage holidays have now ended for most customers unless they have successfully applied for an extension due to ongoing financial hardship.
- Stimulus grants, such HomeBuilder, and a raft of grants and schemes for first home buyers which are designed to encourage economic activity.
If you’re interested in buying or selling property on Sydney’s Upper North Shore, contact our team today.