2020 started well for our local property market.
Buyer competition was strong, auctions were competitive and many sellers were looking to bring their properties to the market. Then, of course, the COVID-19 pandemic struck and we found ourselves in a very different set of market conditions.
We look at how the coronavirus has changed Sydney’s real estate market and what it means for you if you’re looking to buy or sell.
1. Stock levels fell
Interestingly, the first place we really noticed a change in the property market was in the attitude of sellers, not buyers. Some people who were looking to bring their property to market worried about what the pandemic would mean for prices and decided to hold off from listing. A few who had listed even withdrew their properties from the market.
This began to affect stock levels. CoreLogic reported that in early May 2020, listings were as low as they’d ever been. You only had to walk through the streets of normally busy Potts Point, Darlinghurst or Bondi Beach to notice the number of ‘For Sale’ signs starting to dwindle.
2. Prices stayed stable
While some sellers may have been getting cold feet, buyers were not as affected. There were still many active property hunters in the market, right through the final quarter of FY2019/2020. Many were still prepared to buy and this was reflected in the fact that we were making good sales right through the first wave of the pandemic.
It’s also reflected in the fact that, in our key areas, prices barely changed. Realestate.com.au reported that the median unit price in Potts Point kept rising between March and May before dipping slightly in June. Meanwhile, the median house prices in Darlinghurst and Bondi actually rose and the median dwelling price in Elizabeth Bay and Woolloomooloo stayed stable.
This is a sign that there is enough buyer interest to keep prices relatively close to where they are now, at least for the time being.
3. Fewer people are going to auction
When Sydney experienced its lockdown, physical auctions were taken off the list of permitted activities. We were required to hold any auctions remotely or move to another method of sale. This had the effect of accelerating the takeup of digital auctions but it also meant more people began selling via private treaty.
Sale by expressions of interest has become way popular too. This isn’t necessarily a bad thing. Expressions of Interest can be the most effective way to sell a unique property or one whose value is hard to gauge. So it’s a technique I’ve advised many clients to use in the past and will continue to use right now.
It also means, however, that the auction numbers don’t necessarily reflect the true amount of activity that’s happening in the market right now.
4. Commercial property is struggling
When COVID-19 first struck, one of the first things that the Commonwealth government did was to order rent relief for commercial tenants. This was where they believed the pandemic would be felt most acutely.
Our experience is that this has certainly been the case. Commercial landlords are no longer getting the same return on investment they once did. If this continues, it may even begin to affect the value of some commercial property.
Fortunately, so far, businesses in our key areas haven’t been hit as hard as some parts of Sydney. By and large, the cafes and shops of Macleay Street have kept trading.
However, that may change if the COVID-19 cluster around Potts Point continues to grow.
These are four key ways COVID-19 has already changed the local Eastern Suburbs property market here in Sydney. However, the virus still here and relief such as JobKeeper soon set to be scaled back, it’s likely to change further still.
If you’d like to know more about the current market, get in touch today.