Selling Your Home In 2021?

There are high expectations for the Sydney residential property market as we gear up for the first sales of 2021.

In this article, we look at why selling conditions are so good right now and the issues to watch in a constantly changing market.

The property market in 2021

As we mentioned in our 2020 market report, there are many factors pointing to positive selling conditions in 2021.

Consumer confidence has not only returned to pre-COVID-19 levels but has reached a 10-year high.

The Australian economy has shrugged off the technical recession, while NSW has been leading the nation in reopening the economy and restoring jobs lost in the pandemic.

Property sales have been buoyed by record low-interest rates and the Reserve Bank’s statement that it doesn’t expect to increase the 0.1% cash rate for at least three years.

Eliza Owen, CoreLogic’s Head of Research Australia, says we can expect a strong start to 2021.

“Overall, the housing market outlook for 2021 is positive, given highly accommodative monetary and fiscal policy, signs of an economic recovery and many first home buyer incentives remaining in place through to early next year,” she says.

Inner city and inner west maintain their appeal

Erskineville and Alexandria residential property performed well in 2020, reflecting the strong appeal of the inner city and inner west.

The median price of Erskineville houses and units rose by more than 5% over the past 12 months, exceeding the national average.

In Alexandria, while median unit prices dipped 2.68%, median house prices jumped by more than 18% over the past 12 months.

These figures should provide confidence to potential sellers as we enter 2021.

COVID-19 still a concern

There are still some market issues for sellers to monitor.

The pre-Christmas COVID-19 outbreak on Sydney’s northern beaches, then in the West, reminded us all we can never take things for granted.

However, with vaccines now rolling out around the world, it is hoped the pandemic threat will ease in coming months.

This will enable domestic – and, eventually, international – borders to reopen and facilitate a more sustained economic recovery.

Government stimulus coming off

Another consideration is the scheduled removal of government and industry stimulus measures in the first half of 2021, including mortgage repayment holidays.

As we highlighted in November, $195 billion of mortgage debt was deferred during the economic fallout of COVID-19.

However, the Australian Banking Association has confirmed the number of deferred home loans has dropped significantly, from 436,000 in June to 145,000 in November, alleviating the threat of distressed sales and reduced property values.

The removal of the JobKeeper wage subsidy in March presents another potential economic hurdle – but there is also good news on this front, with fewer people requiring the payment.

The Federal Government has revealed 1.6 million people received the allowance in December, down from Budget estimates of 2.2 million.

Pent-up buyer demand

Recent market activity suggests there is plenty of buyer interest going into 2021.

In its final auction report for 2020, CoreLogic noted activity peaked in the second week of December when it would normally taper off.

In Sydney, 1,009 properties were auctioned, with a clearance rate of 73.1%, well up on the 875 auctions and 68.8% clearance recorded for the same week in 2019.

This marked the eighth consecutive week Sydney has exceeded 70% clearance, on the highest volumes since April.

The Inner West recorded a healthy 74.2% clearance rate, while clearance rates in the City and Inner South area were slightly lower at 65.3%.

In addition, figures by the Australian Prudential Regulation Authority show Australian households have saved more than $100 billion in their bank accounts since the pandemic began – and property could be high on their shopping list.

And as we noted in November 2021 could be a game-changer for the NSW property market, with the State Government considering replacing upfront stamp duty on property transactions.

We’re feeling very confident about the year ahead and are happy to help you with your property plans.