Sydney’s property market bucked the odds in 2020 to finish strongly.
Will the good news continue this year? We take a look at what to expect from Sydney’s Upper North Shore property market in 2021.
Current property market conditions
The 2020 property market defied dire predictions to finish on a high. By December 2020, the median Sydney dwelling price was up 3.7% on December 2019’s figure, which is a most encouraging result for a year dominated by a global pandemic. The strong finish to 2020 leads us to expect the property market to resume with momentum this year.
Australia’s economy is officially out of recession and with the roll-out of the COVID vaccine on the horizon, economic recovery is set to continue. Conditions are ripe for property price growth in Sydney. Together, low interest rates and low stock levels are leading to more active buyers and a sense of urgency in the market. It is expected that the effect of stagnant population growth, which traditionally puts downward pressure on property prices, will be offset by historically low interest rates.
During the pandemic, Australians amassed $110 billion in savings, and it is anticipated that many will be looking to put their savings towards a new home or an investment property. Continued government stimulus for building and renovations and, quite simply, our increased state of normality are also driving buyer demand.
2021 property market predictions: what the experts are saying
Three of Australia’s ‘big four’ banks are predicting growth in Sydney’s dwelling prices in 2021.
NAB’s group chief economist Alan Oster says Sydney’s house prices will grow 4.4% over the course of 2021. ANZ predicts Sydney prices will rise 8.8%. CBA expects to see a lift in Sydney property prices as soon as the first half of 2021, noting that the NSW Government’s proposal to allow property owners the option to pay an annual property tax in lieu of stamp duty will also bolster property prices into the future.
Back in September, Westpac predicted a slow start to 2021 for Sydney property prices but anticipated that they will then rise 14% between 2021 and 2023.
SQM Research’s The Housing Boom and Bust Report 2021 predicts Sydney prices will increase between 7 and 11 percent in 2021.
What does this mean for Upper North Shore property sellers?
During 2020, median prices for both houses and units increased (with units in Killara remaining steady) in Turramurra, Killara, Wahroonga and St Ives. A solid finish to the year gives us every reason to believe that 2021 will continue along the same positive trajectory.
Given that they are less reliant on investors and overseas arrivals, regional areas and middle and outer ring suburbs, like the Upper North Shore, fared better in the 2020 property market than inner city areas. With international migration still on hold, we expect this trend to continue.
2020 was also the year of the great ‘working from home experiment’. Many people realised they no longer needed to live quite so close to the CBD, and interest and prices in regional and middle and outer ring suburbs increased as buyers prioritised lifestyle over proximity to the city. As people formally combine commuting with working from home and continue to place less emphasis on their travel time in 2021, we expect to see this pattern remain.
With both stock levels and interest rates low, competition to secure property is likely to be high this year. 2021 is a good time for vendors to capitalise on the predicted strong market conditions. If you’re thinking of selling, increase your chances of achieving the best price by preparing your home for sale.
For further in-depth analysis of the Upper North Shore property market, our December 2020 Ku-ring-gai market report is available now.
If you’re thinking about selling on Sydney’s Upper North Shore, contact our team today.