Can you believe it’s October and we are well and truly in the fourth quarter of 2020? Daylight savings has arrived, the kids are back at school, the days are warmer and Avalon Beach is coming into its prime for the summer ahead.
As far as the local property market goes, in our 3rd Quarter of 2020, we experienced a very strong, competitive market here on Sydney’s Upper Northern Beaches. More people are wanting to buy into the area and auction results are performing above expectations. According to realestate.com.au, The Avalon Beach Median House Price sits at $2,087,500 today, and Palm Beach sits at $3,450,000 which is a continuation of the steady rise this year in local property prices.
It seems foolish to attempt to predict where the property market might land as we enter into 4th Quarter 2020, after all, it has been a year like no other, however, I can report as to what we are seeing on the ground and what we might expect moving forward.
There’s an abundance of buyers
Demand has always been high for property on the Northern Beaches, even more so now, with COVID-19 revolutionising the way we work. With greater flexibility and a push to work from home, the outer Sydney beach villages have seen an influx of buyers.
The short of it is… the commuting to the CBD barrier has been dismantled for many, and more buyers are looking ‘beyond the bends’.
We are also seeing rentals in low supply, which means buyers who have sold and are considering renting in the intermediate whilst finding the perfect purchase, have very little rental options, therefore, are under more pressure to buy.
Buyers coming from further abroad
In the last few months, we have seen buyers coming from all over and far abroad. Many have sold up and are cashed up from the Eastern Suburbs, Inner City suburbs, interstate and overseas. Enquiries are coming in from Melbourne buyers who are looking to move as soon as the borders are re-opened. Properties are even being sold ‘sight unseen’, via virtual inspection, buyers agents, and some bidders bidding remotely from overseas.
Holiday’s are at Home
Lockdowns, border closures and travel restrictions… 2020’s holidays will be local. It’s no surprise Avalon and Palm Beach are in hot demand for holiday rentals with almost all already booked out for the summer.
With international and interstate holidays off the cards, for the time being, local owners who would ordinarily be taking overseas holidays will most likely be in their homes or holiday homes over the summer holiday period.
The beaches, property and lifestyle of Avalon and Palm Beach are unrivalled… this summer is set to be a busy holiday season, with locals staying home and visitors coming in.
Borrowing is cheap right now
This year we have seen interest rates plummet to all-time lows, with current RBA rates at the historic 0.25%.
This has made borrowing cheaper with buyers stretching themselves and borrowing more, which in turn is keeping prices high.
In some cases, mortgage repayments can be lower than rent payments which is resulting in new and first-time buyers entering the market as they are choosing to buy rather than rent.
There is talk of further interest rate cuts in coming months and easing of lending restrictions in March 2021. Nothing is certain, though we anticipate interest rates will remain low for the foreseeable future. It looks like cheap money is here to stay, at least for a little while.
Stock is low
SQM Research shows that listings on the Northern Beaches have been consistently low this year with around 1,000 total properties listed per month from May to September 2020.
As you can see from the graph, listing numbers since 2010 have been on a steady decline for ten years on the Northern Beaches, and have levelled this year. This is another key reason why local property prices we predict will remain strong in the postcode of 2107 regardless of a wider economic downturn. The Upper Northern Beaches remains a property hotspot with demand outweighing supply – fewer people are selling than those wanting to buy-in.
What to expect
The end of 2020 is fast approaching. With a standard auction campaign typically running for four weeks and most campaigns avoiding dates past mid-December we can expect expect more property to come to market over the next four weeks up to mid-November.
What hasn’t launched by mid-November will most probably be postponed to a 2021 campaign.