Experts reveal the Sydney suburbs set to soar
Experts reveal the Sydney suburbs set to soar
Investors are expected to resharpen their focus on Sydney in 2021, with undersupply in popular suburbs likely to push prices up, while regional markets in New South Wales are also poised for a solid year.
Real Estate Institute of New South Wales chief executive Tim McKibbin said Sydney’s fundamental supply issues would again emerge over the coming months, even as listings pick up and auctions resume following the holiday break.
“Supply of houses to buy is constrained and in most markets, so is the supply of places to rent. Vacancy across the board is tight, with only a few exceptions in markets overly dependent on international students, including select inner-ring suburbs,” Mr McKibbin said.
“Unlocking new supply must be a critical priority for the government at all levels.”
Rental vacancies also stabilised in Sydney towards the end of 2020, ending a long period of uncertainty and a rise in empty rental properties that characterised much of the year.
Mr McKibbin said overall vacancies were now 3.3 per cent in Greater Sydney, while vacancies in the Inner Ring, which was most affected by the pandemic, have dropped to 4.4 per cent of rental properties.
“As we reached the end of a chaotic year for the inner city and regional rental markets, the vacancy rates continued to stabilise,” Mr Mckibbin said.
“Though, with this latest COVID-19 wave now hanging over NSW, it will be interesting to see how the market fares during the first quarter of the year.”
Notwithstanding what is hoped to be short-term uncertainty, Sydney’s market fundamentals are likely to result in real price growth momentum.
Last year, Greater Sydney house prices rose by around 4 per cent, despite the challenges of the pandemic.
Property pundits are expecting price growth to range between 6 per cent and 10 per cent in 2021, and even higher for family homes in Sydney’s Inner Ring and lifestyle locations.
And despite the recent outbreak of COVID in Sydney’s Northern Beaches, the region is likely to continue the strong growth experienced in the last quarter of 2020, according to Strand Property Group founder Michael Ossit.
Mr Ossit said out of area buyers would be attracted by the larger homes and blocks on offer in the Northern Beaches, with demand expected to be highest for houses valued from $2 million to $3 million.
“I shouldn’t be surprised as I have always believed in the perennial demand in the Northern Beaches market, but given a global pandemic, a six-month economic recession and so much uncertainty, the market has been extremely resilient and bounced back quicker than anyone could have expected,” Mr Ossit said.
“This is due to the double whammy of existing owners holding onto their homes, and the increase in demand from out of area buyers.”
“If the international vaccine rollout is successful and international borders reopen to student and skilled migrants, we will see the rental market continue to strengthen and short-term accommodation also boom from the increase of intrastate, interstate, and hopefully international tourists,” he said.
Buyers Domain principal Nick Viner also said he sees potential for price growth in the apartments sector, but not until the second half of the year.
Mr Viner said the price growth would be predicated on international borders being reopened, and if that occurs, boutique apartments in blue-chip suburbs would be in demand from first-time buyers and investors alike.
“International students, expats and even those regretful of doing the sea change/tree change will return, and this will inevitably lead to stronger demand for units, particularly close to the CBD,” Mr Viner said.
Elsewhere in Sydney, BFP Property Buyers principal Ben Plohl said he expected strong buyer activity to continue in the Hills District, where it is now common for 30 to 40 people to turn up to open homes.
“Clearly, these types of numbers are music to the ears of vendors, many of whom are selling their properties within a day or two and for significantly more than they had been expecting,” Mr Plohl said.
“Many buyers are clearly frustrated with their inability to secure a holding in this desirable part of Sydney’s north.
“Demand for property has ramped up over the past quarter, with many prospective residents considering a tree- or leaf-change from the inner city.”
Your Property Your Wealth director Daniel Walsh said he expected houses in the suburbs would outperform inner-city units in 2021, with buyers set to prioritise lifestyle benefits over proximity to the CBD.
Mr Walsh said suburbs in Sydney’s southwest, around Camden, would experience increasing demand, as well as more affordable locations on the Central Coast.
“In higher end markets, we will see increased demand around the Northern Beaches due to the low stock levels and current shift towards lifestyle living,” Mr Walsh said.
Buyers agent Grant Foley said certain areas in regional New South Wales would also likely continue to benefit from city dwellers seeking a lifestyle change.
“The rise of work from home and reduction of days worked in CBD offices has resulted in buyers considering areas and suburbs that were previously deemed ‘non-commutable’,” Mr Foley said.