There’s so much we could talk about when it comes to the 2020 property market. Below, I focus on four driving factors that I feel are of most relevance to our local property market in the Upper Northern Beaches, Avalon and Palm Beach.
Avalon Beach is a high demand suburb. Realestate.com.au reports that it has 1103 visits per property, which is 28% higher than the NSW average, which has 792 visits per property.
According to Domain, Avalon Beach is 84% owner occupied and 16% rentals. If you compare that to other Northern Beaches suburbs such as Dee Why which is 52% owner occupied and 48% rentals, we understand that the lower percentage of investment properties is the reason why stock does not turnover as quickly here as it does in other suburbs in Sydney.
Renovating rather than selling
Because of the increasing transitional costs of selling and buying, some owners are opting to renovate instead of selling.
John McGrath states in The McGrath Report 2020, “Upgraders in big cities are paying close to $100,000 in fees and absurdly high stamp duty. If we went back just 20 years for direct comparison, we are now paying and additional $40,000 (inflation adjusted) or 400% more in real terms”
A growing number of owners on the peninsula are choosing to take the cost of the taxes and fees and allocate that money into reinvesting it back into their own home.
Stock to pick up as the year progresses
SQM Research shows that listings on the Northern Beaches have been at a ten year low as we ended 2019 at 551 total properties listed. We have seen an increase in Jan 2020 to 661 properties listed.
All the commentary is telling us that whilst listing numbers have started modestly in 2020, we will be seeing a steady influx as the year moves forward.
Prices to stay strong
Commentary is saying the market will continue to stay strong and improve over the first half of the year, however may cool down in the second half of 2020. Take for example Domain’s forecast for 2020, experts say the Sydney market will peter off mid-year.
Ultimately, the market is driven by supply and demand and the reality is little supply, lots of demand means prices will continue to stay strong and may even increase.
Another element driving prices up is interest rates being at an all time low. We’ve had three consecutive interest rate cuts by the RBA in 2019, resulting in a historic low of 0.75% as of October. The lending environment has relaxed again after the tightening of policies that followed on from the Royal Banking Commission.
You might be wondering whether you should be buying or selling in 2020, is this the right time for you?
Or maybe you are needing to sell, or are desperate to find the perfect home on the peninsula. If this is you, I would love to chat through options and help you move forward on your property journey. Contact me today.