Market Report: December 2020
Sydney’s eastern suburbs property market has experienced a surprisingly positive year despite the uncertainty of COVID-19.
Sydney’s eastern suburbs property market has experienced a surprisingly positive year despite the uncertainty of a global pandemic.
How 2020 played out
2020 began well for the Sydney property market. At the start of the year, confidence was high, buyers were out in force and competition was fierce. The median Sydney property price lifted almost 5% in the three months to the end of February taking the property market almost back to its 2017 peak.
Then COVID-19 hit and the world seemed to change almost overnight.
As we went into lockdown over March and April, mortgages were put on hold, auctions went online. Sellers were understandably reluctant to make a move during this time and property listings took a nosedive from their already low levels. People were staying home and many decided to invest in a renovation, rather than move. The government stepped in with rent relief measures and placed a moratorium on evictions and this became a rocky time for investors.
Then, in April 2020, consumer confidence hit its lowest level since 1991.
To help boost a rapidly declining economy, the government introduced JobKeeper and the JobSeeker boost. Then the RBA slashed the cash rate twice to a new record low, making it cheaper than ever to borrow money.
Fortunately, we still had many active buyers seriously looking to transact and even through the worst of the conditions, sales prices remained strong.
In fact, even during the most challenging months of 2020, we still achieved some excellent sales. 177A Albion Street, Surry Hills broke the Surry Hills suburb record when it sold for $11.5 million on 29 April 2020. And, we continued to have success with strategies such as off-market sales, as well as through expressions of interest.
We took the view that, no matter how long the lockdowns and restrictions lasted, normalcy would one day return to the market. When it did, it was clear that the same fundamentals that have always made the eastern suburbs property market one of Sydney’s most desirable, were still there.
The market rebound
As the second half of the year kicked into gear the market changed. The end of the lockdown signalled the start of a market rebound. Auction clearance rates began to rise, more stock entered the market, more buyers were keen to transact and, by the start of November 2020, prices had again lifted to the point where they were up 6.1% over 12 months.
Things were looking up, as reflected in the Westpac-Melbourne Institute Index of Consumer Confidence which, by November had grown to 13% above the six-month average prior to COVID-19. In fact, the “time to buy a dwelling” index increased by 8%: its highest level since 2013.
The value of new housing loan commitments grew for the fifth consecutive month according to the Australian Bureau of Statistics, with home loan commitments for owner occupiers reaching pre-GFC levels.
CoreLogic’s national index rose in November for the second month in a row, with dwelling values increasing by 0.8% over the month. This came after a 2.1% drop in Australian home values between April and September.
Looking at Sydney more specifically, our city experienced a rise of 0.4% over the month, and 0.3% over the quarter. That means the annual rise in dwelling values in the 12 months to 30 November was 3.7%.
Some of the other good news stories
The premium property market has continued to show strength and some suburbs have achieved remarkable growth over 2020 in the face of almost unprecedented uncertainty.
According to Domain data, several eastern suburbs experienced double-digit price growth by the end of the third quarter of 2020.
For units, Darlinghurst topped the list at $1,130,000 with 35.3% growth year-on-year, while Rose Bay came second at $1,450,000 – a 31.8% year-on-year increase.
According to data from realestate.com.au, the median price for houses in Paddington also increased to $2,475,000 by the end of November, with units increasing to $860,000.
Woollahra was another good news story with the median house price reaching $3,550,000 and units $1,200,000.
One final, and interesting piece of data comes from Domain’s School Catchment Report. Released in late 2020, it revealed that property in the catchment for Vaucluse Public School had risen 19.7% year-on-year, placing it in the top ten growth rate for Sydney by primary school catchments.
As we’ve written before, families will often pay extra to be near the right school for their kids.
Key sales in 2020
This one bedroom, one bathroom apartment sold for $695,000 in just one day, reflecting the high demand from buyers for properties of this type.
It’s rare that a William Smart designed home hits the market and we felt privileged to sell this completely transformed three-bedroom terrace, one of Paddington’s finest homes.
The owners of this unique property incorporated strong sustainable design into every aspect of the home.
2020 shows just how difficult it can be to forecast what will happen to the property market. It also shows that, even the experts can be wildly wrong in their predictions.
As the year draws towards a more positive end, we’re hopeful 2021 will be a good year for the property market. After all, it’s withstood a global pandemic and a one-in-30 year recession over the past 12 months.
If you’re interested in buying or selling in Sydney’s East contact my team today.