Yearly Market Wrap
We take a look at the year that was in 2021 for Sydney’s eastern suburbs real estate market.
Despite protracted lockdowns, COVID outbreaks, job keeper ending, and the continued closure of international and interstate borders, there’s not much about the property market in 2021 that wasn’t good news for sellers. There was plenty of demand, relatively low supply, great lending conditions, and month after month of continued price rises.
Adapting to living with the virus
Last year it seemed an impossible concept, but in real estate, as in other parts of life, we have had to adapt to living and working within a pandemic. In 2021 buyers, sellers and agents adjusted to the reality of COVID 2.0.
Inspections were one-on-one, giving us more time to get to know buyers and help them on their journey. Marketing materials such as videos and photos became more important, and people became comfortable with online auctions. And we sold numerous properties to overseas buyers who conducted virtual inspections but never set foot in the property in real life.
Prestige properties did particularly well in recent months but really all segments have benefitted over the past 12 months, with buyers capitalising on strong growth across the board. That said, we believe people who bought this year will also see their properties rise in value over 2022 and into 2023, albeit at a more sustainable level than this year.
Where the eastern suburbs property market sits right now
Australian housing values rose 1.3% over November according to Corelogic, the 14th consecutive month of positive value growth, which saw national housing values rise 22.2% annually and Sydney prices up 25.8% on a year ago.
Despite talk of the market softening, CoreLogic also reported that the last weekend in November was the busiest in their history, with over 4000 properties across the capital cities going to auction. CoreLogic argues that the strong selling conditions we’ve seen this Spring are likely to continue once the holiday season ends, and that auction activity is likely to ramp up earlier than usual in 2022.
Our auctioneers, Cooley Auctions, have also released some interesting data showing that Sydney’s total auction volume in November 2021 was up more than 42% on the previous year, with 583 auctions held. They also reported a clearance rate of 69% for November 2021, but with 74% of properties selling above reserve, and an average of 4.7 registered bidders per property.
This shows buyer demand is strong, and nowhere near saturated. What’s more revealing is their results show an average sale price of $2,273,169, up 41.2% on a year ago. They also show that 38% of properties sold prior to auction.
As we’ve discussed before, economists and the banks are still forecasting price rises for 2022, even if they’re not expected to be as steep as those we’ve seen over the past 12-18 months.
The year that was in Sydney’s Eastern Suburbs
My team broke three suburb records this year.
- 14 Rosemont Avenue, Woollahra – a new Woollahra suburb record
- 175 Underwood Street, Paddington – a new Paddington suburb record
- 1 Bronte Marine Drive, Bronte – a new Bronte suburb record
Other notable sales included:
16/16 Notts Avenue, Bondi Beach – $20,100,000
Early in 2021 the auction for this four bedroom, four bathroom penthouse broke the record for the highest apartment sale under the hammer, and the Bondi Beach record for an apartment.
1/746 New South Head Road, Rose Bay – $13,500,000
This stunning, harbourside property set a new apartment record for Rose Bay.
156 Hargrave Street, Paddington – $5,300,000
I was honoured to sell the iconic Savill Gallery in Paddington on behalf of its owners.
39/9 Ward Avenue, Potts Point – $330,000
This one bedroom 23 sqm apartment in the heart of vibrant Potts Point was the cheapest property we sold this year.
Housing affordability the flipside for first home buyers
Perhaps the demographic which has gained the least over 2021 has been first home buyers. Rising prices mean they face having to save an even greater deposit in order to get onto the ladder. Now we’re noticing increased competition from investors deciding to re-enter the market.
In fact, data from REIA’s Housing Affordability Report showed the real flipside of these price gains, which is that housing affordability declined over the September quarter, with buyers needing 36.2% of their income to meet increased loan repayments nationally. That puts them at risk of mortgage stress. Two decades ago the same figure was 27.2%.
The average loan size increased 21.4% in the past 12 months for NSW and, unsurprisingly, the number of first home buyers decreased over the September quarter in all states and territories.
2021 has been a year of groundbreaking growth for the Sydney property market and there’s no reason to think the end of the calendar year will make too much difference to the strong buyer demand that’s been feeding it. But what we believe could change the market is a dramatic increase in supply.
While this may be our last article for the year, we’re not signing off just yet. Keep an eye on our website because we’ll be sending some great properties to market in the lead up to Christmas.
Wishing you and your family and safe holiday season and a happy and healthy 2022.
And, if you’re thinking about buying or selling in Sydney’s eastern suburbs contact my team today.