So far this year we’ve seen a surge in the local property market with a strong increase in sale prices and buyer/rental demand at an all-time high. The question now on everyone’s mind is whether the current market intensity and rapid price growth will continue into the second half of this year.
The fuel behind the surge…
COVID-19 saw a significant change in our day-to-day lifestyle, travel and work environment. For the majority of last year most people were working from home and in many instances, businesses are choosing to continue to operate in this way for the foreseeable future. This has seen a definite increase in demand for properties within the Sutherland Shire, as those from the Eastern Suburbs and Inner West, in particular, look for an ideal lifestyle property that offers space and work from home capabilities.
A sustained period of lower than average stock levels has equally generated buyer competition and an increase in sale prices with properties in short supply and demand strong. Across greater Sydney, March saw a small increase in the number of homes available with April recording a significant rise (40,630) in the number of properties on market. We are yet to see the effects locally with demand still outstripping supply and the number of available properties below 600. When stock levels do begin to rise, we will eventually see a situation where supply and demand begin to equalise and the emergence of a more balanced market.
Investors are back and first home buyers are active
First home buyers are still active in the market despite the price increases and with the Federal Budget unveiling a range of first home buyer incentives in the recent budget we expect this trend to continue. As predicated at the start of the year, investors are also back with a 12.7% increase in the value of new investor home loans written in March, the largest monthly increase since 2003. Sentiment within this group continues to strengthen as low interest rates and rising prices provide an attractive option.
The results of the surge
Clearance rates have been strong, averaging 89% across April/ May with an average of 6.8 bidders attending each auction and properties selling for 4% above set reserve prices. On the ground our team have reported strong results across the board with 42 Soldiers Road, Jannali attracting 33 groups at its first open house and selling prior to auction for $1,370,000. Equally 42 groups inspected 15A Warrigal Street and with 5 buyers competing, the property went on to sell for $1,700,000, setting a new benchmark for a duplex in Jannali.
Is now the right time to sell?
The current market is not showing any signs of slowing down just yet, so those looking to sell can remain confident that the market is still ‘hot’ with buyer demand holding near record highs. It is important to take into consideration that all market cycles eventually shift and if stock levels rise, supply vs demand balances out and buyer fatigue begins to set in, it is likely we will see a local market with more measured growth toward the end of the second half of this year.
The rental market
The rental market is also buoyant with the demand for larger townhouses, villas and houses at a high and looking set to continue for the foreseeable future. 1 Ortona Parade, Como leased for $730 per week ($10 above asking price) after 5 applications were received from the first open home, whilst 1/6 Kurrajong Street, Sutherland was leased off-market for $580 per week; a $20 increase from the previous tenancy.
Many renters are looking for larger dwellings that allow a dedicated home office or spare bedroom space that affords a work from home arrangement. Outdoor areas and extra living space are also highly sought after to juggle the demands of home schooling, activities, family time and lifestyle living. If you have been looking to downsize or relocate, renting out your property can be a great way to trial a new living arrangement. With rental stock levels low and demand strong now might just be the ideal time.
For those with investment units, demand is increasing with many renters keen to find a place to call home. Supply is higher and it’s important to accurately price your property. This was the case with 4/1 Morley Street, Sutherland which attracted 2 applications after the first open for inspection and leased for $440 per week.
Selling, buying, investing or renting?
The Sutherland Shire property market is strong across all fronts and while there are currently no signs of it slowing down, it will be interesting to see how things develop over the coming months and into the second half of this year. For those looking to sell, the winter months may prove favourable with demand still high and low stock levels seemingly set to continue to Spring.
If you have been looking to make a real estate change, whether it be selling, buying, investing or renting, our team is here to discuss your property plans for the future.
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