5 Ways COVID-19 Has Changed What Property Searchers Want
COVID-19 seems to have changed everything, including what buyers want from their next property.
We take a look at five important ways the pandemic has impacted what buyers are looking for in a home.
1. Upsizing driving the market
One of the most obvious ways that the pandemic has changed our lives is that we tend to be spending a lot more time at home. For many of us, this has meant a sudden desire for more space – whether that’s in the form of a home office, a second living area or even a garden to enjoy (and escape from) family life. So we’re seeing more upsizers as a proportion of buyers than we can ever remember.
As a consequence, there has generally been greater demand in the market for houses than for apartments. CoreLogic data shows that in the first eight months of 2021, the median Sydney house price lifted 23.3% compared to an 11.5% lift in the median apartment price.
Drilling down further, in our key areas we’ve also seen a gap open up in the price between three- and four-bedroom properties. For instance, in Woollahra, the median price for a four-bedroom house lifted 42% from 2020 to 2021, according to Domain data. This compares to a median rise of 8.4% for three-bedroom houses. The same trend played out in Bondi, where the four-bedroom house rose 20.2% from 2020 to 2021, while three-bedroom houses gained a more modest 4.7%.
2. Lifestyle properties in demand
In line with the trend for more space, we’re also seeing a lot more demand for lifestyle properties. This might include a home with a swimming pool, rumpus room, man cave or even a tennis court or other distractions that make living at home a lot more pleasant.
But it equally includes homes close to the beach, park or other attractions.
There’s perhaps no better example of this than the Bondi apartment we sold for a record $20.1 million in March 2021. This was a special property offering the best of what the beachside suburb has to offer, including expansive views over the beach itself. We had no fewer than five parties bid at auction, creating a new suburb record and demonstrating the high level of demand out there for premium properties.
3. Privacy becomes more important
Just as space has become more important, so too has privacy. Interestingly, studies have shown this is part of a global trend, with more than half of buyers saying they value privacy in their home more than they did pre-pandemic.
One of the key reasons for this is the increased number of people working from home. In fact, the same study found that 61% of us were performing more work from home than before. And focusing on what we do for a living can be difficult when there are kids around, a television on or even neighbourhood noise. Little wonder than that it’s featuring so highly on people’s wish lists.
4. Escape becomes a priority
ABS data shows that since the pandemic struck, more people have left our major metropolitan areas for the regions than ever before. Sydney lost about 30,000 over 2020.
We’ve noticed that some people who haven’t made a permanent move to the country or coast have bought a holiday house there, intending to spend more time away from the hustle and bustle. Others still have decided just to opt for a different pace of life without leaving the city.
For this reason, we’re seeing unprecedented interest in quality properties around the beaches. For instance, we’re currently seeing enormous interest in 1 Bronte Marine Drive, which boasts views directly over Bronte Beach and offers scope for buyers to create their own dream lifestyle.
5. Renting less attractive
One economic effect of the pandemic was that the RBA decided to cut the official cash rate to a new record low and then announced that it intended to keep it there for some time. This meant that banks also cut their interest rates so that it became possible to borrow money and pay less than 2% interest.
For many people renting, buying suddenly became an attractive option. After all, with a 20% deposit there became little difference in the monthly price of renting compared to buying in many instances, especially in the entry-level market.
For instance, in Surry Hills, the median one-bedroom apartment price is $780,000, according to realestate.com.au data. If you were to borrow 80% of this amount or $624,000 on a 30-year mortgage paying 2% interest your monthly repayments would be around $2,306 a month. Meanwhile, the median rent on a one-bedroom Surry Hills apartment is $500 a week or $2,167 a month – a difference of just $139.
Savvy renters are beginning to recognise this and we’ve seen more first home buyers enter the market over the course of the pandemic – one of the positives to come of the past year and a half.
It also helps that first home buyers often have access to generous State and federal government grants and concessions.
Some things never change
Despite all the changes that COVID-19 has brought to the property market, some things never seem to change about the Sydney property market. And one of the most important is that quality eastern suburbs property almost always proves to be a sound long-term investment.
If you’re thinking about buying or selling in Sydney’s eastern suburbs contact my team today. We’re still running at full capacity and carrying out one-on-one property inspections in line with COVID restrictions.