How Sydney’s Lockdown Is Impacting The Property Market
There’s little doubt that lockdown has impacted the Sydney property market – but not necessarily in the ways many people expected.
Before the current lockdown, the Sydney property market was in full swing, with buyers out in force, prices surging and sales records being shattered. But with most of us now staying at home, many expected activity to pause and prices to stabilise or even fall.
So far, however, that hasn’t happened. Sydney was in lockdown for the entire month of July 2021 and yet the median dwelling price over those 31 days rose 2.0%.
This means the median Sydney dwelling price is now 17.7% higher than it was on 31 December 2020. The median house price – as opposed to apartment price – has performed even more strongly, lifting 20.9% over the first seven months of this year.
So what’s behind these numbers? And what are we seeing on the ground?
Less, but more focused, activity
It’s true that we’re seeing less activity with open homes off-limits and inspections now taking place only online or one-on-one by appointment. But that doesn’t mean we’re seeing fewer buyers. Those who are serious about securing a home – and there are many people out there who fall into this category – are still searching, taking the time to book an appointment to see a property, or interacting with us online.
This is supported by recent Domain data which found that there were fewer people searching online for properties in Sydney than this time last year. However, a higher proportion of those in the market were willing to act, with online email enquiries up almost 40% compared to last year.
Domain also found more people were taking virtual tours through their platform. They were also more likely to share property listings with family and friends – usually a sign that they’re further along in their property journey.
How this is playing out in Sydney’s eastern suburbs
We’re finding that a lot of buyers prefer one-on-one appointments to a crowded open home. It gives them the opportunity to ask questions, spend time examining the property without distractions and also build a better connection with us, as agents. It also means we can get a better understanding of exactly what they’re after, so that we can help them on their property journey and let them know when we have a property that meets their needs.
On the down side, running the sales process one-on-one or online does reduce the sense of energy in the market. Buyers can’t see their competition, nor can they read the body language or gauge the level of interest from other buyers face to face in the same way they can at a live auction.
The need for speed
The fear of missing out (FOMO) that gripped the market earlier in the year isn’t quite as intense, but at the same time, buyers aren’t hesitating to make an offer when they see a property they’re interested in. Many buyers have been in the market for a home for months. They often have more time available for their search than pre-lockdown and they’re willing to speed up their due diligence on a home and make an offer quickly.
After all, even well into this lockdown, most people in our local market have retained their jobs so they’re not as impacted financially as some have been. Interest rates remain low, household spending is down and savings are high. So people have the ability to put more money into their home and they’re often willing to do so.
This is having a real impact on how long properties are lasting on the market. Neither off-market listings, nor open listings are hanging around. Four week campaigns often turn into fortnight – or even week-long campaigns – as properties receive genuine offers more or less immediately.
For instance, just a couple of weeks ago, we opened an apartment at 13/1-3 Fullerton Street Woollahra for one-on-one inspections on a Saturday and showed 25 people through. We opened it again for a second inspection on Monday and it sold.
While this may be an excellent result, it’s not unusual to show six-to-eight very interested buyers through a property in one-on-one inspections and then to have multiple offers within a week.
How this lockdown is different from the previous one
Importantly, this lockdown feels nothing like the initial 2020 lockdown when the market stagnated and prices went down. For starters, we have the precedent of the last lockdown where prices began rising more-or-less immediately after restrictions were eased. Based on this, it seems people feel more confident about the fundamentals underpinning Sydney’s real estate market.
Anecdotally, we believe the timing of this lockdown is important too. Christmas is often an artificial deadline people give themselves for buying a home and moving in. Even if the current lockdown is lifted in September, that doesn’t leave a lot of time until the end of year to find a home, make an offer, exchange, settle and move in. Many people want to secure a home before then, so rather than wait, they’re actively looking and making offers.
If you’re looking to sell, our advice is to take advantage of the current conditions and to list your property now, before restrictions get lifted.
We’re still running at full capacity, in line with COVID restrictions. So, if you’re thinking about buying or selling in Sydney’s eastern suburbs contact my team today.