I’m sure you’ve all seen the doomsday flyers plastered on poles around Mosman warning, “This skyscraper could be next door to you! Aah!”. An unfolding that has come off the back of the controversial Minns government development plans for 377,000 new homes by 2029 – with councils in Sydney’s eastern and northern suburbs responsible for delivering about 41% or 107,100 of those new homes.
But, as we know, the government has been facing significant push-back from local councils and residents who are collectively screaming “not in my backyard!”.
The article “Politics: Six Sydney suburbs haven’t built a major project in years” discusses this local resistance, with councillors across Sydney referring to the plan as a “cookie-cutter approach” and a “blanket policy” that does not take into consideration heritage preservation, housing affordability and the impact on low-income communities.
I was recently reading a fascinating Forbes article titled “Evolution May Be Purposeful and It’s Freaking Scientists Out” by Andrea Morris dealing with the idea that organisms evolve with intention. This idea of intentional evolution really got me thinking. Bear with me here.
Like organisms adapting to their environments, our cities should also evolve with intention and foresight. It’s important to consider not only the economic incentives and construction logistics but also the social, cultural and environmental impacts of our development decisions.
The government’s plans to rezone land around eight “priority high-growth areas” and 31 metro and railway stations will allow the construction of up to six-storey apartments, regardless of the area’s existing density.
They also have plans to ease restrictions on building smaller apartment blocks and townhouses in suburbs where such developments are currently prohibited. However, these changes alone will only partially meet their target of 377,000 new homes for NSW.
My question is: who will be able to afford these homes?
If land and building prices continue to rise, we’re constructing properties valued at four, five, or six million dollars each, which would only exacerbate the issue of unaffordable housing.
If the government really wanted to address housing affordability it makes more sense to build in locations that genuinely support those most impacted by high housing costs, rather than continuing to push prices higher in already expensive areas.
They have also announced a $200 million incentive scheme that rewards councils meeting and exceeding new housing targets with funds for new sporting facilities, parks, footpaths and road maintenance.
However, their “cookie-cutter” approach seems to disregard the most suitable areas for development, which are those with existing infrastructure and transport links, such as Military Road, which can handle increased capacity and provide access to amenities like restaurants and public transport.
Many parts of Mosman and Cremorne, for example, are inconvenient to access, while the flat land of Balmoral is simply not conducive to high-rise projects. This isn’t a case for “not in my backyard”; but as someone who has worked in the area for 30 years, I’m really quite perplexed by the practicality of these plans.
Not to mention the cultural impact it will have. How many heritage buildings will be affected? What will our local communities look like in ten years? Do we want them to look that way? As I attempt to find answers to these pressing questions, I am reminded of a provocative limerick from none other than Dr. Seuss: “We have brains in our heads, we have feet in our shoes, we can steer ourselves in any direction we choose.”
While development plans are an exciting prospect and essential for the growth of our business, they should not come at any cost. I think it’s time we reflected on the concept of intentional evolution and begin steering ourselves purposefully toward a future that preserves our heritage, supports our communities and sustains our environment – rather than rushing to meet arbitrary deadlines.
As our cityscape evolves, so too do the market dynamics driving much of that development. To recap from my last update, there has been growing activity from the bank of Mum and Dad in Sydney with 60 percent more first home buyers receiving financial assistance from parents or other family members since 2017.
Interestingly, in May, we observed a significant uptick in the sale of one-bedroom units, reflecting both investor activity and growing interest from owner-occupiers and first home buyers alike.
More recently, talks of interest rate rises instead of declines, following the RBA’s June board meeting, has taken a little bit of oxygen out of the market. However, Sydney home prices saw a 0.3% increase in March and now stand just 1.4% below their previous peak in January 2022.
This robust annual growth is impressive given the significant decline in affordability following the sharp rise in interest rates last year. With a limited supply of quality properties amidst rising demand from homebuyers, investors and increased immigration, I expect Sydney property values to continue rising throughout the year.
A recent cold snap and persistent rainy weekends over the past eight weeks have also impacted market conditions, with buyer confidence showing some fluctuations in the latter part of the quarter.
One particularly interesting evolution in the real estate market, however, is the decline in traditional bank dominance, marked by shrinking net interest margins and heightened regulatory scrutiny post the royal commission. This has paved the way for mortgage brokers and private lenders to ascend the ranks.
In fact, mortgage brokers now facilitate approximately 75% of new home loans, offering borrowers access to a wide array of lenders and competitive rates that traditional banks struggle to match. This shift has put borrowers back in the power seat, making price and service the primary drivers in lender selection rather than brand loyalty.
Why? Well, mortgage brokers not only negotiate favourable terms but they also provide invaluable financial literacy and guidance through the complex home loan process. Unlike banks, brokers have a duty to act in their clients’ best interests. They are also typically remunerated by lenders, meaning there is no direct cost to the borrowers.
At Ray White Lower North Shore Group, we see first-hand the difference that the expertise of mortgage brokers can have for our clients. Our in-house mortgage broking service, led by experts like Matt Clayton, can help you find the right solutions and navigate the intricacies of the mortgage process with ease.
Matt and his team at Loan Market go above and beyond to ensure our clients not only find the best terms possible, but also enjoy a seamless experience from application to approval. With a focus on your best interests and no direct cost to you, the team at Loan Market ensures you get the most out of your property investment.
At Ray White Lower North Shore Group, we thrive on adapting to evolving market dynamics. With the increasing prominence of Chinese buyers in the Sydney real estate market, we have taken proactive steps to meet their unique needs. This led to the establishment of our China Desk, a specialised service dedicated to serving Chinese clients with tailored solutions.
Sabrina Gao, a cornerstone of our team, has spearheaded the establishment of our China Desk with great success. Fluent in Mandarin and English, Sabrina brings a wealth of experience from her diverse career, which includes translating for international conferences and managing Airbnbs before transitioning into real estate nearly a decade ago.
Sabrina’s China Desk provides a thorough service, leveraging well-known Chinese platforms such as WeChat and RedBook (China’s Instagram for millennials) and partnering with TikTok influencers.
Sabrina really is our secret weapon – her proficiency as a Chinese specialist distinguishes her from other agents, blending a contemporary viewpoint with a profound cultural insight. Plus, she has a heart of gold!
Sabrina’s achievements, such as the recent $19 million property sales and the recent successful auction of 25 Beauty Point Road, underscore her pivotal role in connecting high-net-worth clients with prestigious properties in Mosman.
A more bittersweet alteration involves Frank Bird, our esteemed Sales and Leasing Manager at RWC Sydney North, who is transitioning into retirement after more than two decades of exemplary service. Frank’s legacy in Mosman’s commercial sector is characterised by his integrity, keen business acumen and profound interpersonal skills.
His tenure has been marked by expert guidance in sales and leasing operations, navigating both corporate and private investment sectors with a focus on fostering professional relationships and achieving superior outcomes. Frank is a true trooper and a great friend, and we will miss him dearly. We wish him all the best as he embarks on the next chapter of his life.
As we navigate these transitions, Ray White Lower North Shore Group remains dedicated to delivering unparalleled service and expertise. Whether through Sabrina’s innovative approach to international clientele or Frank’s legacy of trust and professionalism, we pride ourselves on setting new standards of reliability in times of both continuity and change.
As residents begin moving into Akoya Greenwich, the development’s completion highlights the growing trend of buying off the plan due to rising building costs. By securing a property before construction is completed, buyers can often lock in prices before these costs rise any further, offering potential savings and a hedge against future price increases.
In the broader new build market, planning changes for low to mid-rise developments across Sydney have been delayed until after the September local government elections, which could potentially impact new projects. Meanwhile, the NSW Building Commissioner has been persisting with improving the standard of the building industry by holding builders and developers accountable for delivering quality projects.
Ray White Projects Lower North Shore continues to offer a diverse range of new projects throughout the area, including Willoughby, Crows Nest, Cremorne, Mosman and Kurraba Point. This variety caters to a broad spectrum of buyer needs and preferences, reflecting ongoing activity and fresh opportunities in the property market.
We have an apartment still available in Akoya, for anyone interested. View it here.
As we experience the first typical winter market since COVID, we are witnessing a higher number of online property listings and extended days on the market. Vacancy rates have risen and there’s a noticeable shift in tenant preferences – from two bedroom units in the $700-$1000 range to larger houses.
The winter trend this year includes an increase in both furnished and unfurnished short term rentals as people take advantage of the opportunity to travel to Europe. This seasonal migration has also led to more tenants breaking their leases, undeterred by the associated penalties. Another emerging trend is the rise of “rentvesting,” where property owners choose to rent out their own homes while renting another property elsewhere, often to capitalise on rental income or to live in a different location temporarily.
In the high-end market, buyers have been spoilt for choice, reflected in the picky demand for accurately priced homes. We’ve found that properties listed for even $100 or $200 above market value struggle to attract views, so ensuring pricing accuracy at this time is crucial.
The outlook for the commercial real estate market is still positive even in the face of higher interest rates and persistent inflation which have created challenging economic conditions, causing yields for quality strata investments to rise by 0.5-1% in line with the current interest rate cycle. Indicators of future stability such as employment rates and consumer confidence offer a more secure investment environment, particularly in strong markets like Sydney’s Lower North Shore.
With numerous transactions completed, leasing has proven particularly resilient in the last quarter. I anticipate a slower recovery from reduced trading volumes over the past 24 months to be led by well-capitalised private investors seeking out quality opportunities.
Such sophisticated private investors, characterised by their long-term horizons and preference for stable, income-generating assets are leveraging market insights now more than ever to make informed decisions, paving the way for recovery and growth in the commercial real estate sector.
In the current loan market, we’re seeing several notable shifts. Firstly, as the bank’s margins continue to erode, opportunities are opening up for existing clients and those looking to refinance, with some banks now offering rates below 6%.
With fewer loans being submitted, turnaround times for loan processing have significantly improved, resulting in faster responses from the bank’s processing teams. However, the era of cash back offers for refinancing has ended, leaving only ANZ and ME with such incentives.
As the banks continue to tighten their purse strings, the mortgage broking market continues to expand, with brokers now holding over 75% of the market share. This has led to increased competition among brokers and more diverse debt requests, prompting a rise in second-tier and private lending options. As a result, borrowers now hold more negotiating power, with price and service becoming the key factors in choosing lenders over brand loyalty.
Central Mosman has shown remarkable resilience in the property market, with sales exceeding expectations in popular areas like Holt, Spencer and Glover. This is a significant improvement from the sluggish conditions observed this time last year.
A key factor contributing to this success is the active participation of Chinese families across all property categories thanks to the successful processing of 188 Significant Investor Visas (SIV) to 888 Permanent Residency status. This has facilitated the emigration of older family members who have been highly active in all market segments.
However, the trend of “42 Days” completion on the front page of selling contracts was an exception rather than the rule this quarter. Many buyers are purchasing new properties before selling their current ones, driven by the fear of being out of the market. Consequently, contracts with longer completion periods of 12, 16, or even 24 weeks have become more common and are expected to continue.
Interestingly, there is a noticeable divide between successful and unsuccessful selling campaigns, even for houses located close to each other. This disparity is primarily due to differences in pricing strategies. Plus, the demand for practical yet spacious living solutions remains strong, driven primarily by downsizers who often express the need for smaller homes that can still accommodate visits from children and grandchildren.
Stock has been unusually tight through winter to date, particularly in the Cammeray plateau, which has faced short supply for years. However, we are currently marketing and preparing several homes in this area, which should quench some of the demand in this tightly held part of the Lower North Shore.
The apartment and townhouse market has seen a steady supply, primarily due to buyers upsizing and investors offloading properties amid sustained high interest rates. Confidence remains high despite uncertainty about future interest rate movements, with many buyers and sellers accepting that even if rates decrease, the reduction won’t be significant. Consequently, they are no longer delaying their plans to upsize or downsize, reflected in the high enquiry levels and open home attendance.
We are also witnessing a number of different selling and pricing strategies, causing confusion among buyers. Several properties that didn’t sell at auction ended up selling within two weeks for above the vendor’s expectations, demonstrating auctions as the best and most transparent way to build competition, maximise prices and establish market value.
Many clients have also been seeking clarification on the state government’s rezoning plans and their impact on future property values. With the situation still a moving target, we are happy to discuss these developments with homeowners.
On a brighter note, in June I participated in the Stars of the North Cancer Council’s annual ‘Dancing with the Stars’ event at North Sydney Leagues Club in Cammeray. Personally raising nearly $28,000 and conducting a live auction that raised almost $220,000 for Cancer Council NSW, it was a rather successful event. Partnered with Kristy Wynter from Evolution Performance Centre in Crows Nest, who volunteered her expertise and commitment, we both thoroughly enjoyed the experience and were proud to support such an amazing organisation.
Our office, which services Crows Nest, North Sydney, Kirribilli, McMahons Point, Waverton and Wollstonecraft has seen a vibrant and resilient property market this quarter. Residential sales have shown steady growth, with median prices up 2% year-on-year and a 3% increase in transaction volumes from the previous quarter.
Rising buyer confidence this quarter has contributed to a higher volume of transactions and faster sales. Standout sales include my pre-market listing on Elamang Ave, Kirribilli, Ben Markos’s resale of 11A Bray St, North Sydney and Claire Stulatjer’s impressive auction at 6/14 Hayes St, Neutral Bay.
In the rental market, demand remains robust, particularly for properties near transport links and amenities. Vacancy rates have slightly decreased, reflected in rental prices which are holding strong. One-bedroom apartments in Crows Nest and Wollstonecraft typically rent for $600 to $650 per week, while premium properties in North Sydney and Kirribilli are fetching higher prices. Jason Jiang, our Senior Property Manager, has been doing an excellent job in this domain, adding 9 properties to our rent roll this quarter.
Overall, the Lower North Shore remains a prime location for both buying and renting, thanks to ongoing infrastructure developments and its reputation for a high-quality lifestyle. With a stable market and strong fundamentals, these suburbs continue to be highly sought-after.
The Willoughby market has recently witnessed brand new homes achieving incredible outcomes and breaking suburb records. This surge in demand extends to classic federation-style homes that have undergone complete renovations, making them highly sought after. Properties on large blocks are also popular, especially those that may need some work or offer the opportunity to build new homes.
Buyers are also increasingly conscious of the costs and time required for building, showing a preference for properties where the work has already been completed. This trend reflects a desire for immediate occupancy and a turnkey lifestyle, avoiding the uncertainties and delays associated with construction.
Consequently, homes that are move-in ready and require minimal additional investment are commanding premium prices and driving strong sales performance across various segments of the market, further reflecting the robust demand for well-presented, finished properties.
If you would like any advice on the market, please get in touch with our team. We’re here to help.
We’re excited to partner with Giant Steps again this year, a special school for kids and individuals with autism. Together, we’re on a mission to raise money and awareness for this dedicated educational centre. Our Mission This September Our aim is clear: collect $100,000 for this incredible charity in … Read more
With a deep understanding of the unique needs and preferences of Chinese buyers and sellers, Sabrina Gao, who is fluent in both Mandarin and English, has become an indispensable asset to the team, particularly in the Mosman area. Sabrina moved to Sydney in 2008 from Jiangxi, China, to study conference … Read more