Last year COVID-19 lockdowns were almost a novelty, this year they became a harsh reality. Once again our homes became not just our havens, but our offices, classrooms, gyms and even holiday destinations. The increasing uncertainty of the pandemic didn’t weaken the property market, it fuelled it and across the first quarter of the financial year, the real estate industry as a whole performed marvellously.
The resilience of the market not only in the Lower North Shore, but across Australia has been astounding. Property prices have continued to surge to unprecedented levels. CoreLogic recently announced that its estimate of the total value of residential real estate in Australia has surpassed a new record of $9.1 trillion, gaining $1 trillion in five months.
The Real Estate industry has weathered the storm. Buyers, sellers, renters, investors, agents, property managers have pivoted and adapted to digital real estate processes. Online auctions, private one-on-one inspections and video viewings became the norm whilst navigating ever-changing restrictions, juggling working from home and home-schooling.
Through a mixture of hard work, resilience and an unfaltering commitment the property market continued to thrive and achieve new levels.
Public open homes to private qualified inspections
Physical open homes were no longer an option when the snap lockdown was announced in late June. The industry had to quickly find an alternative. One-on-one private inspections combined with virtual video tours and 3D mapping continued to attract prospective buyers and fuel a competitive market.
Capitalising on eager and pre-qualified buyers, vendors brought forward their campaigns and we facilitated more deals pre-auction than ever before. According to REA insights, the typical days on site for properties for sale in New South Wales stood at 30 days in August, down an incredible 42 days from 12 months prior.
Notably, the unconventional process of hosting auctions online didn’t unnerve potential buyers. The average number of bidders remained consistently high in the Lower North Shore. During September Sydney recorded a weekend clearance rate of 85.3 percent – the highest monthly clearance rate ever recorded.
Expats continue to stimulate an intensifying market
Despite lockdowns, expat couples and families sought to return to Australia as their safe haven. They accelerated their plans to come home and continued to land in our luxury market.
Depending on where they were residing, expats were able to get better value for their money due to the conversion rates of the AU dollar. Seeking proximity to the CBD, prestigious schools and intimate tranquil communities, many were determined not to miss out and secured properties having only viewed them via video.
If purchases were missed, expats quickly snapped up luxury rental properties in our market to hold for six to 12 months while they searched for their dream home.
Combined with upsizers and downsizers, expat buyers boosted luxury property prices to new heights. Consequently, according to global property researcher, Knight Frank, luxury homes are forecasted to rise by 10 per cent in 2021, and an additional 7 per cent in 2022.
Pre-approved buyers incite competition
Homes and loans are inextricably linked. When the property market reaches a fever pitch, the lending sphere follows suit.
The insanely competitive market in the Lower North Shore drove different borrowing strategies from potential buyers. Aided with the digitisation of the lending process, an influx of pre-approved buyers surged across the Lower North Shore. They bid confidently for high end properties and adopted an ‘If I can’t have that one, I will bid on the other one’ approach to the market.
In response to the consistently buoyant property market, the Australian Prudential Regulation Authority (APRA) recently announced a tightening of lending regulations. While these subtle serviceability buffers will curb the ratio of high debt to income borrowing, they are not expected to have a negative impact on price growth in the property market, especially in the Lower North Shore.
After being thrust into another impending lockdown, renters continued to flock to the Lower North Shore in the rental upgrade phenomenon.
Large light-filled living spaces and private studies were highly sought after and prospective tenants offered significant increases to asking rents in order to secure properties ahead of the competition.
Similar to open homes, the online due diligence and property viewings created decisive renters who were ready to move on rental properties faster. 83 per cent of prospective renters believe that a virtual tour helps them to improve their rental shortlist, according to the Digital Inspections Consumer Survey by the REA Group.
This pivot to digitisation propelled more qualified rental applications and some deposits were being paid in less than 24 hours from first viewing the property.