Half Yearly Market Report - June 2021.

STRENGTH TO STRENGTH

Sydney’s property market has recovered stronger than ever this year.

Median house prices peaked at a record $1,309,195 in the first quarter of the year, an 8.5% increase over three months, and the most rapid quarterly rise Sydney has experienced since 1993.  

This performance has had notable onflow effects, including spiking levels in open home attendance as potential buyers flocked for their chance to secure a home amidst a rising market.

Over the second quarter, results remained positive, with some welcome shifts in the pattern and pace of growth and buyer numbers stabilising, bringing us into a more levelled out, quality over quantity environment.

Supply has shown a significant reduction, as have days on the market compared to this time last year. The combination of both low supply and minimal days has left the market with the best stock possible.

Buyers have also demonstrated higher levels of savviness in regards to where value exists, with many monitoring the market and exercising discretion, informed judgment and a firm stance where they see value to be had - or not. 

WHERE TO FROM HERE?

We expect a seamless and symmetrical continuation into the second half of 2021, with economists forecasting property prices will continue peaking on the back of record low interest rates. 

Unsurprisingly, Sydney is expected to lead the market higher, with predicted prices finishing the year up to 21% (approximately $216,000) higher.

With auction clearance rates circa 80% range, the ratio of buyers to sellers is likely to ensure property prices remain buoyant. Recent lending figures show that investors are also returning to the market, as the value of investor loans increased by 48.1% in the last six months alone. 

Consumer confidence in real estate is well and truly back on track, having recovered from the peak of COVID restrictions and uncertainty. The continuing combination of low interest rates, tax cuts, and new incentives announced in May’s Federal Budget have complemented the current market, and is likely to remain static for now, seeing us through to the end of the year.

PROPERTY MANAGEMENT MOVEMENTS

The rental market has shown interesting variances this year, beginning with a flurry of activity and change as people chose to start the new year afresh. 

Most properties received multiple applications, with inner west houses holding the most sought after position. 

Comparatively, there was a strong demand for units but at reduced rental prices, in line with much higher supply levels. Rental supply has been directly affected by many tenants changing their living arrangements, moving back in with their parents, and sharing homes, as well as reduced migration and a decrease in seasonal workers as a result COVID. 

Supporting this impact more broadly is Sydney’s current average rental yield of 2.7%, a 3% decrease from this time last year, across the board.

As working from home becomes more prevalent, space is a desirable commodity. One bedroom units are less in demand than 2-3 bedroom dwellings, and as the colder weather settles in, we can expect less movement, leaving those properties priced right and immaculately presented at the forefront of the rental market this winter.

Note: Although open home inspections and in person auctions are not able to be conducted until Saturday 10 July we will be offering private inspections during this period. Please be assured we remain amply prepared and will continue working on your behalf to secure you the best possible result in line with the NSW Health Advice.