As we enter into the winter property market season and exit Covid-19 restrictions the question I’m hearing most is – what is the property market doing?
While mainstream media made initial suggestions the market would plummet (in some cases up to 30%) this has not been realised on the ground, at least not yet.
So, why is our local property market not currently falling? I take a look at the data from our regional property market and put forward some thoughts on where we might be headed this quarter.
Sydney’s Property Market Stays Strong
Sydney’s property prices have held up well during the COVID-19 crisis. Across the city’s market, CoreLogic reports that median property price rose 1.1% in the three months to 31 May 2020 and the median price has grown a total of 14.3% over the past 12 months.
We are seeing fewer properties come to market than at any time in recent memory. In fact, CoreLogic reported that total listings in the 28 days to May 2020 were 30.1% lower than a year ago – and stock levels were reportedly low then, so because supply is low at the moment, demand remains high.
Sydney auction clearance rates have also stayed strong this last week. They are comparable to this time last year at 70% compared to 71% in June 2019.
Avalon Beach Is A Hotspot
For those of us that live in the Upper Northern Beaches (between Mona Vale and Palm Beach) we are seeing a constant flow of qualified buyers eager to purchase. Across Mona Vale, Newport, Avalon Beach through to Palm Beach and surrounding suburbs, we have more buyers than we do sellers and so fundamentals of supply and demand are prevailing.
Many of our buyers have not been financially affected by Covid-19 restrictions and in some cases, they are prospering. Many buyers are also motivated by lifestyle. The Upper Northern Beaches has always been a lifestyle choice for those seeking to move further away from the hustle of inner-city, and with working conditions changing and becoming more flexible, we have new buyers jumping on the ever-increasing wave to buy in the Upper Northern Beaches.
The combination of low stock, low interest rates, prosperous buyers and a fundamental shift in buyer psychology towards lifestyle choices has seen the market remain steady from early January through March and continuing into the current month of June.
Looking at median house prices it is clear the numbers reflect this.
Realestate.com.au figures show, that at the end of January, the median house price in Avalon Beach stood at $1.91 million – The year kicked of positive for our local real estate market. But stands strong today at $2.025 million.
To date, the economic impact of Covid-19 hasn’t been enough to undo these gains.
Upper Northern Beaches median prices include:
- Median house price Palm Beach: $3,330,000
- Median house price Whale Beach: $3,350,000
- Median house price Clareville: $2,300,000
- Median house price Bilgola Plateau: $1,740,000
- Median house price Newport: $1,850,000
- Median house price Mona Vale: $1,780,000
Expectations for the coming Winter Quarter
With the economy being kept afloat by the Unprecedented $213 billion federal government stimulus package the property market remains stable. The big question is, how will the economy respond when the stimulus spending finishes?
While some analysts predict Sydney property prices will start to fall, they generally don’t expect to see sharp declines unless a large number of owners are forced to sell – something not on the cards just yet.
Jobseeker payments are scheduled to finish on September 27th, it may be then that we start to see larger movements in the economy which may echo through the property market as businesses relying on these stimulus payments are yet to know whether they can keep their head above water without it.
We expect this quarter will remain steady and strong for property in the 2103 to 2108 postcodes. We live in a coveted and high demand area, our lifestyle is unrivalled and with employers becoming more flexible with working from home options, more buyers are looking to purchase their ‘forever’ home in our further-from-the-city coastal villages.
Stock levels remain relatively low, buyer interest remains high, therefore our view is that this should help insulate the market for the coming quarter.
It’s also been wonderful to see local businesses reopening and our community getting back to its vibrant and active routine. Buyers are out and about, many people are rethinking priorities and embracing change this winter.
If you’d like to track the value of your home, compare recent sales and find out how much your property is worth in the current market, you can get your free estimate here.