Lockdown 2.0: Where The Property Market Stands

This has been an incredible year for the local property market.

Low-interest rates, short supply of quality properties and strong buyer confidence have pushed prices to record highs.

In fact, in the eight months to 30 August, the median Sydney dwelling price lifted 19.8%, according to CoreLogic data. The median house price (as opposed to apartments) has lifted even further, rising an incredible 23.3% since the start of the year.

So if anything was going to end the Sydney property market’s stellar run, you would think it should be a prolonged lockdown.

Metropolitan Sydney has been under stay at home orders since late June, with open homes and live auctions banned, and real estate agents restricted to showing buyers through homes one at a time. And yet, even through these conditions, agents, buyers and sellers have adapted and property prices have continued to rise.

Over July and August, the median Sydney dwelling lifted 3.8%. That’s more than it rose over the entirety of 2020.

Inner city and inner-west markets stay strong

Here in the inner city and inner-west, we’re right in the thick of the action. With more of us spending more time at home, we’ve noticed many people have been ramping up their property searches during lockdown, not calling them off.

It’s as though a lot of people who may have been considering a move at some stage, have decided that they finally have the time to do proper research. So they’re taking advantage of today’s record low-interest rates, getting their finance together and looking for somewhere to live. At the same time, stock levels remain low. SQM data shows that across Sydney there were 27.5% fewer properties for sale in August 2021 than in August 2020.

As a result, we’re fielding more enquiries per property than we can remember.

Sales times reduced during lockdown

We’re also selling homes faster. Prior to this lockdown, our properties were listed for an average of 27 days before selling. Since lockdown began, this has fallen to just 18 days.

The strong interest we’re getting on many of our listings means that we’ve been able to reduce our auction campaigns from four weeks to just three weeks. We’re also getting strong interest in off-market sales. Usually, we’d sell an average of only one property through this sales method each month. Now, we’ve sold seven since lockdown began.

As a result of these campaigns, we’ve achieved several sales records during the current lockdown. This includes breaking the building record in “Datum” Alexandria twice within a week.

First home buyers and investors competing

For most of 2021, property price gains have been driven by upsizers. These are often people who’ve been spending more time at home and have decided that more space is high on the agenda, often for a home office. As we’ve reported, this trend has driven the median house price up at a much faster rate than the median apartment price.

While upsizers remain a factor, we’re now also seeing investors return to the market in greater numbers, as well as first home buyers. These groups are both seeing relatively good value in apartments, terraces and townhomes.

In fact, with a 20% deposit, buying a home costs a similar amount each month as renting one.

As first home buyers and investors come into the market and compete over similar properties, we expect the apartment market could outperform the housing market over the remainder of the year.

What this means if you’re buying or selling in Sydney’s inner west and inner city

In this market, buyers should be prepared to act quickly. Putting yourself in a strong position means getting your finance in place, carrying out any inspections and having your solicitor review the contract for sale as early as you can.

While open homes are off-limits for the moment, you can still view homes via one-on-one inspection. As always, it pays to check out as many properties as you can so that you know the market and can compare what’s out there.

It also often pays to be assertive. A lot of owners will accept a pre-auction offer which can help you get a property off the market before others have the chance to buy.

For potential vendors, it’s important to remember that, while this is a great time to sell, you generally also need to have somewhere to move to. If you haven’t yet secured your next property, it can be a good idea to negotiate a longer settlement period. That way you’ll give yourself more time to find somewhere to live and can potentially time your purchase to coincide with your sale.