Why Sydney is looking so Positive - January 2021
By Guest Blogger, Terry Ryder, founder,
hotspotting.com.au and propertyU
Sydney markets have defied the pandemic recession, with notable uplift in sales activity and prices 2020 evolved. This was particularly so with housing markets, although some of the apartment markets have struggled.
CoreLogic data shows house prices up 4% in 2020 and no change in apartment prices, while Domain figures show house rents up 5% while apartment rents fell 7%.
These are generalised figures and there are different scenarios at a local level. Many suburbs across the Sydney metro area have had double-digit growth in their median prices in the past year.
Hotspotting’s latest quarterly survey of sales activity shows how well Sydney markets have done in defiance of the pandemic – the survey identified more growth markets than at any time in the six years of these quarterly surveys.
The more expensive sector is being led by the Inner West and the Northern Beaches. We have classified 10 suburbs of the Inner West as rising markets, including Annandale, Ashfield, Camperdown, Dulwich Hill, Leichhardt, Lilyfield, Rozelle and Stanmore. These are mostly suburbs with median house prices between $1.5 million and $2 million, although Strathfield is higher at $2.45 million.
The other standout is the Northern Beaches, where Balgowlah, Avalon Beach, Collaroy, Forestville, Freshwater and Manly all have rising markets. Most have median house prices in the $1.5 million to $2.5 million range. Quarterly sales in French Forest have been 31 38 49 45 42 58 and the median house price has increased 17% in the past 12 months.
Other top end precincts with buoyant markets are the Eastern Suburbs including the municipalities of Woollahra, Waverley and Randwick. Quarterly sales in the suburb of Randwick have been 66 93 116 121 136 151 and the median house price has risen 14% in the past year.
A few tiers below those markets pricewise, Sutherland Shire continues to show signs of being an up-and-coming market. Eight of its suburbs are either rising or consistency markets, headed by Engadine, Menai, Sutherland and Bangor.
The more affordable parts of the Sydney metro area are also buoyant. Out west, the Blacktown and Penrith municipalities both have seven suburbs with rising sales activity, while in the south-west the Camden and Campbelltown LGAs jointly have 12 rising suburbs.
Danger markets remain in Sydney, particularly in precincts dominated by apartments including Sydney City and Parramatta, Sales activity has dropped at a time of high vacancies in these areas.
Our analysis of price trends across the Sydney metro area tells a remarkable story of stubborn resistance to the forces of the pandemic.
Most suburbs have delivered growth in their median house prices in the past 12 months – and most also have had growth in the most recent quarter.
Sydney’s good performance in difficult circumstances has defied the predictions of some analysts. Those who believe population growth is the most fundamental factor influencing real estate have been confounded by the outcomes, because the greatest source of population growth for Sydney, overseas migration, has been halted by the pandemic.
Population growth is never the big influencer that some people imagine, and they overlook the compensating impact of expat Australians returning home over the past 12 months.
Others over-estimate the impact of small rises in unemployment – but fluctuations in jobless numbers have never been a major impactor on real estate and 2020 proved this again.
Essentially real estate markets arise from the strength of local economies, with infrastructure spending critical. NSW has long had one of the nation’s strongest economies and it continues to do so. Infrastructure spending continues to happen at very high levels and that is generating economic activity and jobs, regardless of the upheaval from the pandemic.
To find an individual property that ticks all the boxes within your target suburb, I recommend you speak to an experienced and local buyers' agent to fast-track your search.
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