COVID-19 has changed Sydney’s inner-city property market.
As real estate agents, we’ve had to adapt to new conditions and different ways of doing business. So who is selling property right now and why?
Low stock levels define the pandemic property market
You simply cannot talk about today’s inner-city property market without also talking about low stock levels. There’s no getting around the fact that many people are reluctant to sell.
We’ve talked to many potential sellers who are, understandably, uncertain about what the future holds. They’re concerned about financial factors such as the stability of their employment, the performance of their investments and whether the property market is likely to start falling soon. This is causing some to think twice about listing their property for sale.
Interestingly, because few people are coming to market, those buyers looking for a property also face limited choice and good properties are attracting strong competition.
So, even though we are in the midst of the worst recession since the 1930s, low stock levels are keeping property prices high. That means now is actually a good time to list.
This phenomenon is not unique to our area. Sellers across the country are holding off. For example, CoreLogic data shows that in July there were 15.2% fewer properties for sale than there were at this time last year.
Who is selling property during the pandemic?
We’ve noticed that the sellers in the market right now tend to fall into one or more of four categories.
1. Those seeking a lifestyle change
The pandemic has made many of us question the things we hold dear, including our lifestyles. Some sellers have been inspired by the possibilities that the current trend towards working from home has brought. Maybe they’re looking for a different lifestyle, and thinking more seriously about getting out of Sydney, and making that long-held dream of a sea change or tree change come true.
Some are motivated by how much further their money will go outside of the city and we’ve seen many people packing up for good. But others who are moving out of Sydney still intend to keep a foothold in the local area. These people tend to be selling the family home and buying a smaller crash pad in Alexandria or Erskineville.
2. Those looking to upgrade to a bigger or more expensive property
Property prices may not be falling rapidly but the market isn’t on an upswing either. According to realestate.com.au, prices are steady, with the median sales price for houses in Erskineville at $1.4 million, and units $900,000. In Alexandria, houses have a median sale price of $1.51 million and units $747,500.
This kind of stable market can be a favourable one in which to upsize, as prices are unlikely to run away from you before you buy. This means you’ll get a good price when selling, but not have to worry about a huge gap when upgrading.
Many of the upsizers we’re seeing have considerable equity in their existing property and have been thinking about a move for some time. Most of these have been unaffected financially by COVID-19 and have been able to get finance to upgrade. So everything is working in their favour to take a step up the ladder right now.
3. Investors wanting to use the money tied up in their property elsewhere
This year has been a trying one for many inner-city property investors. While capital growth in our area may have been good over time, in June vacancy rates in Sydney’s inner ring hit a 20 year high. Conditions may be slightly improved now, but many inner-city landlords are looking for other ways to generate an income, moving their money into dividend-paying shares or other assets.
We’ve also seen some investors selling their investment properties to use the money elsewhere. Some are looking to upgrade or renovate their own homes. Others are looking to invest in a second home or weekender for themselves, often in regional NSW or further afield.
4. Sellers who want to transact off-market
As we’ve written about previously, we’ve had great success selling property off-market during the pandemic. Selling off-market can be a great strategy during uncertain conditions, which is exactly what the pandemic has brought.
The vendors selling this way often say they’re keen to test the market before committing to a public advertising campaign. However, we have usually been able to match the property with motivated buyers. This has been leading to quick, no-fuss offers, which mean the sellers never have to end up going public to get the price they want.
Today’s coronavirus-affected property market may be a very different one from those we’re used to. But low stock levels means the right property marketed through the right sales strategy will achieve a competitive price.
In short, this can be a good time to sell or to make a property move, especially if you’ve been relatively unaffected by the financial fallout of the pandemic.
Contact our team today to find out more about how we can help you buy and sell in Sydney’s inner city and inner west.