On 11 October 2021, Sydney finally emerged from 107 days of lockdown.
As I wrote earlier this month, not even the tight COVID-19 restrictions could shake our confidence in Sydney property. In fact, the median property price across our city lifted 5.7% over the September quarter, despite lockdown lasting for the entire period.
We saw especially strong interest in lifestyle properties, especially on the Eastern Beaches, which drove up prices in many parts of our local area even faster. For instance, the median house price in Bondi Beach rose 20.5% between March and August, according to realestate.com.au data. Meanwhile, in just four months between March and July, the median house price in South Coogee rose 25.7%.
Even though apartment price growth tends to have lagged house price growth, flats in premium areas have generally fared well too, with the value of Elizabeth Bay units lifting 15.2% since March.
What we’re seeing in the market today
While we were achieving strong sales during lockdown, lack of supply remained an issue. In light of the uncertainty lockdown caused, we noticed that many potential vendors decided not to go to market. Some who had already gone to market even decided to remove them.
The moment that lockdown lifted, we then started seeing more supply hit the market, with vendors becoming more confident. This was accompanied by a similar lift in the number of buyers in the market, with enquiries rising and more people actively searching for a home.
To some extent, this isn’t unusual. Spring is traditionally Sydney’s biggest property selling season: the weather tends to be nice, gardens are looking at their best and there is often a glut of active buyers who hope to secure a home quickly and make a move before the holidays begin.
The market moving forward
This year the traditional Spring selling season seems more compressed and potentially even more active than usual. After all, those who put off buying or listing during lockdown are now faced with the stark reality that there are only eight weeks left until Christmas.
Those hoping to be in their new homes by the time the silly season is upon us need to act fast.
For these reasons, we expect the property market will continue to be strong – at least until the end of this year. As buyers eventually find somewhere to live, listing numbers improve, and the heat comes out of the market, we expect growth to continue but at a more sustainable rate. After all, the same conditions that underpinned the market this year – most notably low interest rates – are set to continue for some time still. The economy also looks set to charge back to life and confidence is growing.
Our view is shared by many economists too. NAB expects Sydney property prices to rise a total of 27.5% this year and 5.4% in 2022. Westpac anticipates the median Sydney dwelling value will lift 27% this year and another 6% next year. And ANZ Bank forecast that Sydney property prices will rise 21% in 2021, 7% in 2022 and then another 3% in 2023.
What this means for buyers and sellers
If you’re looking to list your property, my advice is that this is a good time to do so. With so many motivated buyers in the market willing to act decisively, you may still even be able to settle before Christmas if you act fast.
And it’s a good time to buy too. There is a greater choice of properties available right now than there has been since early 2021, so you’re much more likely to be able to find something you like.
As I’ve noted before, however, there are two main groups I think are benefiting most from current conditions. The first is downsizers, many of whom are finding their family homes are worth far more than they were at the start of 2021, giving them substantially more capital to invest in their move.
The second, and perhaps more surprising for many, is first home buyers – especially those prepared to start out with a one-bedroom apartment. That’s because apartments haven’t experienced the same price growth as houses, especially at entry-level.
Many are likely to find that, with record low-interest rates continuing, it’s actually often now cheaper to buy an apartment than it is to rent one. This is especially true in inner-city Sydney suburbs such as Potts Point, Darlinghurst, Woolloomooloo and Rushcutters Bay.
If you’re looking to buy or sell in Potts Point or Sydney’s eastern beaches contact my team today.