Despite the uncertainty surrounding the COVID-19 pandemic, Sydney’s property market is already showing of signs of further increases through 2021.
At the end of 2020 Corelogic reported a +3.73% change in its Sydney Home value index over the last year, with houses +4.95% and units +0.98% (year on year). Experts are projecting that The NSW market is likely to experience strong price increases in the range of 10-15 per cent in 2021 due to a combination of events that have changed the landscape of the property market.
The current market is in the hands of sellers, with a lack of stock and high demand for purchasing. We believe that this high purchaser demand is driven by the following factors which will reflect in an upswing on housing prices.
COVID-19 has turned the way we live upside down. Reductions in international travel, greater flexibility around working arrangements and the avoidance of crowded inner-city areas have driven many Sydney-siders South as they place a higher priority on finding a home that offers a high-quality lifestyle. This particularly includes waterfront homes and properties with a home office, a pool or that are close to beaches, to enjoy the benefits that this type of lifestyle reaps. Perhaps a quick dip in the summer heat during their work break.
Whilst working from home is a common reality in this current climate, a connection to work is still valued as the possibly of going back into work becomes more likely with talks of several vaccinations likely to roll out this year. Future planning of the new F6 Motorway/SouthConnex (subject to RMS and State Govt approval) accommodates to this, making the Sutherland Shire a hot destination for buyers to meet their lifestyle needs with only an approx. 15-20 minute travel time to the CBD.
LOW INTEREST RATES
The lowered interest rates as a result of the COVID pandemic have stimulated investor and first home buyer confidence. RBA economists believe a permanent percentage point reduction in official interest rates can drive up real house prices by 30 per cent over a three-year period. However, a “temporary” percentage point reduction in interest rates would push up real prices by 10 per cent. Regardless of the short-term or long-term venture of these low interest rates, house prices see a significant increase in value. This proves advantageous to sellers who would like to get the most out of the property. While buyers are confident borrowing with such a low interest rate, sellers should look to utilise this opportunity if selling their property is something that is being considered.
Other factors which may impact the market in the future:
TRADE TENSIONS AND GOVERNMENT RESTRICTIONS FOR OVERSEAS INVESTORS
The trade tensions with China have taken some investors out of the market at the present time, however once this has been resolved, the resurgence of this type of buyer may further stimulate the real estate market.
If you are considering selling, there are many buyers out there who are ready to take advantage of the current conditions. Contact the team at djw property to discuss your property needs on 9544 9688.