Strong Spring selling market set to continue to Christmas

23 November 2020

The Sydney spring selling season continues to defy COVID-19 with one leading auction firm reporting an auction clearance rate of 70% for the 719 properties booked for auction in the middle weekend of October.

“At present, accurately priced properties whether they’re located in Cronulla, Warriewood, Bankstown, Penrith or Narellan are attracting plenty of attention,” said James Pratt of James Pratt Auctions[i]. “Buyers are motivated to purchase properties across the metropolitan area but are also aware the economic climate in 2020 has changed.”

James also offered, “Unquestionably, buyer and seller activity has picked up since winter, with housing markets across Sydney producing strong sales results.”  The sale of a prestige home in northern Sydney highlights the market’s strength. The property sold under the hammer for $620,000 above the reserve price with 17 registered bidders vying for the property.

The average number of registered bidders at Sydney auctions was up by 30% in the middle weeks of October compared to the start of September, according to James. “As long as there are properties to sell, we expect the spring property market to extend right up to Christmas.”

Sutherland Shire – demand is off the books

Overall, it’s been a very festive spring selling season for housing markets in the Sutherland Shire such as Cronulla, Caringbah, Miranda, Menai, Gymea, and Burraneer according to Blake Spooner, a sales agent from Pulse Property[ii]. “Demand is off the books for good quality family homes priced between $1.8 - $6 million.

“There’s an average of five genuine buyers for every property, and this is helping some vendors achieve sales prices above expectation.” Blake recently sold a home at 134 Burraneer Bay Road Burraneer under the hammer for $1,350,000. This beautifully presented, renovated single level house had an auction guide of $1,250,000 and attracted a total of 110 groups to open homes. Four registered bidders jostled for the prized property. 

The apartment market in the Sutherland Shire region is steady, noted Blake. “Also, most properties priced under $650,000 are drawing attention because they can attract buyers eligible for first homebuyer grants and stamp duty breaks.” 

Whether the spring market extends until Christmas will depend on more vendors listing their Shire homes, Blake advised. “There is a real lack of supply in family homes. If more hit the market, we’ll be working right up to Christmas.”

The majority (75%) of house buyers of family homes in the Sutherland Shire are locals upgrading from smaller entry-level houses or apartments. “The remaining buyers are descending on the Shire from the St George region, Eastern Suburbs and even from the south coast of NSW because they can have a coastal lifestyle but with a smaller commute to the city.”

Work from home drives Northern Beaches markets

There is a massive migration of buyers moving from the North Shore and the Eastern Suburbs to Sydney’s northern peninsula, noted Gill Somers, sales consultant, Laing & Simmons Narrabeen[iii]. “People have decided that they can work from home and don’t need to live close to the city anymore.

“We are even getting buyers from inner-city suburbs such as Balmain, and they are moving here because of our region’s relative affordability.”

 Consequently, the housing market is enjoying a robust burst of activity and strong sales results. A 1950s built, three-bedroom house at 117 Veterans Parade, Collaroy Plateau went to auction in October. “The property needs a lot of work, and there were 33 contracts issued. Our auction guide was $1.32 million, and the property sold for $1.52 million under the hammer.”

On the supply side, listings are down, and this is a factor underpinning property values in suburbs such as Dee Why and Warriewood that were impacted earlier in the year by COVID, Gill said. “We have had a remarkably busy selling season. While we anticipate this activity will push into December, the lack of stock won’t make for a deep spring market this year.”

Market is hot in western Sydney

It’s been a scorching Spring selling season in western Sydney suburbs such as Penrith, Mount Druitt, Blacktown and St Mary’s, according to Peter Diamantidis, a sales associate from Raine & Horne St Marys. 

“With government incentives such as HomeBuilder set to finish on 31 December and with many western Sydneysiders staying home this Christmas, we expect the market to continue on its merry way right up to the end of the year,” Peter said. “If the push by developers to extend HomeBuilder is successful, then the outlook into the New Year is very good too.”

On the demand side, Peter says a broad range of buyers including first-timers, investors, upgraders and even downsizers are driving demand for property. “Low-interest rates and government incentives are attracting first-timers to our markets,” he said. 

“Our low affordability, with properties starting from $550,000, are attracting local first-timers, as well as buyers from the Inner West, the Sutherland Shire and even the Northern Beaches.

The region’s massive infrastructure superstars such as the $11 billion Western Sydney Airport at Badgerys Creek, the Sydney Metro railway as well as the Sydney Science Park is attracting owner-occupiers and investors alike, according to Peter.  “Major roads such as the M7 have reduced door-to-desk commutes to the city by almost an hour which is attracting property buyers and business to our region.”

For example, Peter sold a 3-bedroom house with a two-bedroom granny flat at 15 Melbourne Street, Oxley Park for $900,000 to an investor in October. “This property is renting for $730 a week which is a gross yield of 4.2%, which is extremely attractive in a low yield environment,” Peter said. “Investors are looking for value and properties that are well-located, have future potential, or could benefit from a zoning change.”

First home buyers lead the charge in south western Sydney

The housing market in south western Sydney is the headline act, according to Vince Labbozzetta, director, Raine & Horne Liverpool[iv]. “The housing market in south western Sydney is extraordinarily strong and the apartment market is getting back on its feet as investor confidence picks up after COVID.”

First home buyers are leading the charge for entry-level homes, while many people are shifting to suburbs such as Liverpool, Casula, Mount Pritchard, Lurnea, Moorebank and Warwick Farm from outside the region. “With a median house price around $775,000, Liverpool is significantly more affordable than suburbs closer to the city,” Vince said.

“Despite the influx of people new to the region, I just sold a 3-bedroom house at 53 Congressional Drive Liverpool for $715,000 to buyers who already lived on the street.”

Another property at 70 Medley Avenue, Liverpool sold at auction for $720,000. “This three bedder attracted 13 registered bidders and sold above reserve,” Vince noted. “The housing market in south western Sydney is very strong and we expect the sales market to continue to tick over right up to Christmas.”

Meanwhile, 16 kilometres west of Liverpool, Ray White Bankstown[v] agent Craig Stephenson signed up 17 registered bidders to 100 The Avenue, Bankstown  which sold for $890,000 in October, some $100,000 over its reserve. The Bankstown agent said the deceased estate was bought by two local brothers who have plans to develop the block in a duplex.

Properties selling within days on the Central Coast

Away from the NSW capital, and a shortage of properties for sale on the Central Coast of NSW is driving down days on market according to Brett Hunter, a director of the Real Estate Institute of NSW and principal of Raine & Horne Terrigal[vi].

“We are stock poor, and properties whether they’re in Terrigal, Avoca, Erina, Ettalong, Umina or Gorokan in the region’s north are often selling before they even get to open homes,” Brett said. “There are other properties that are taking longer to sell, but overall, we are seeing increasingly strong demand for well-priced, well-presented homes on the Coast.”

There’s no doubt the buyers from around NSW have decided the Central Coast is a great place to be if lockdown restrictions are enforced, Brett continued. “People have also recognised that the world won’t end because of COVID and we’ll be ok – so they are planning for a future post COVID.

“With the government throwing money at small businesses, many are doing well through subsidies, benefits and job keeper programs. The extension of the $150,000 instant asset write-off until 30 June 2022 will also help underpin business confidence and demand for property right up to Christmas.”

Brett nominated Erina and Springfield as suburbs to watch for the remainder of 2020 and into the New Year. “They are reliable residential home or investor markets with days on market less than 30 days.”

Meanwhile, values in beachside locations such as Terrigal, Wamberal and North Avoca have held up very strongly this spring as there are very few properties for sale in these tightly held markets. Brett said, “In October, an older home in a prestige North Avoca location sold for $700,000 above expectations.”

He continued, “Recently we have had three or four properties priced between $900,000 - $1.2 million sell for an average of $60,000 above the reserve.”

Sydney buyers prove a dominant force in Newcastle 

A lack in the supply of stock is also a dominant theme in NSW’s second-biggest metropolitan area, Newcastle, according to Raine & Horne Newcastle[vii] Managing Director Jason Maxwell. “The market is a little artificially inflated because the government has done a phenomenal job,” Jason said. “The staged cutbacks to JobKeeper might impact the market next year.

“But in the meantime, for vendors considering a sale whether they’re in Newcastle, Edgeworth or Belmont, now is absolutely the perfect time to make a move.”

He added, “The market is robust, and every property we list is selling in a relatively short space of time as long as it’s well-located and priced.

“We have plenty of first home buyers looking for properties, while there are many from Sydney who recognise that technology enables them to live and work outside the state capital.”

A recently renovated single-level three-bedroom house at 32 Fullerton Street, Stockton was snapped up by a Sydney buyer for $745,000, said Jason. “We see an increase in Sydney buyer enquiry because those people want to get out of the rat race and into a regional area.”

A waterside property with a narrow waterfront was on the market for $1.95 million and sold for $2 million with several buyers missing out. “There are plenty of buyers vying for every property, said Jason.

“My advice to serious buyers is to have your finance pre-approved by your lender to give you a head start on the competition.”

 

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[i] https://jamesprattauctions.com/

[ii] https://www.pulseproperty.com.au/

[iii] https://lsre.com.au/narrabeen/

[iv] https://www.raineandhorne.com.au/liverpool

[v] https://raywhitebankstown.com.au/

[vi] https://www.raineandhorne.com.au/terrigal

[vii] https://www.raineandhorne.com.au/newcastle

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