Escalation in the Middle East, the war in Ukraine, a US election around the corner, and a softer economy in China all have consequences for Australian property. The uncertainty on each of these issues is enough to impact our real estate market, but all four at once produce a veritable puzzle.
The biggest influence in property market movements for the majority of the year has been the RBA’s ambition to quell inflation with interest rates rises. A robust Australian jobs report last week has tempered expectations of a pre-Christmas rate cut, and with local inflation still above the Reserve Bank’s target, there’s no apparent rush to lower rates. Yet, as markets await the release of the third-quarter inflation report due at the end of the month, CBA is tipping the chance of an RBA rate reduction in December, while NAB expects the central bank will wait until February.
Nonetheless, here on the Lower North Shore, we are seeing decisive buyers at auctions. Those who have managed to weather the storm thanks to cash reserves or the ability to pay down mortgages during periods of lower rates are stepping into a market ripe with value. These buyers are enjoying stronger negotiating positions and greater opportunities for savvy purchases as inventory levels remain healthy in this typically buoyant spring selling season – ripe with fresh listings. Excuse all the spring puns, but it’s a reality that the market really does bloom each year at this time.
The swirling uncertainty surrounding interest rates has contributed to another growing trend – the rise of mortgage brokers. As conventional bank loans become scarcer thanks to tightening purse strings among white-collar bankers contending with shrinking net interest margins and heightened regulatory scrutiny, more and more customers have been falling into the compassionate arms of mortgage brokers offering flexibility and favourable terms.
In fact, recent statistics reveal that around 73.7% of all new home loans are now secured through mortgage brokers. The enticing free service that brokers offer gives borrowers more negotiating power and enables them to navigate the complexities of the mortgage market without the burden of doing all the legwork themselves. So, if you happen to pass a buttoned-up banker looking a little hot under the collar, you’ll know why.
And, as buyers find themselves in a more favourable market, favourable terms just are the cherry on the cake. For one thing, the residential rental boom seems to have stabilised – evident in the weakest September quarter in over four years. The previous surge in rents, which rose by 39% from August 2020 to June 2024, have made a sharp return to reality. This stabilisation should offer buyers some unique advantages, such as the opportunity to negotiate better terms with sellers amidst high rental inflation driven by factors like stretched affordability and overseas migration.
It’s also worth noting that we have observed strong market conditions across the East Coast, particularly in areas like Northbridge and Castlecrag, where sales have been robust over the last quarter. A number of Victorian expats appear to be fuelling these strong market conditions, motivated by stagnant governance and excessive taxes on holiday homes in their home state. This trend is likely to continue, making the current spring market promising for those ready to act, and positioning it as a potential buyer’s paradise.
There’s a couple of stellar moments in recent weeks that I want to celebrate. Our people going above and beyond for the community, clients, and colleagues. Take Kay Wong, for instance, whose efforts in managing our marketing have significantly enriched our community connections. This year, she spearheaded our Giant Steps initiative, a campaign encouraging our team to walk 10,000 steps daily in September to raise funds for a local Giant Steps school, who support children with autism. Last year, we raised an impressive $50,000, and this year, we’re aiming for a bold $100,000. We’re already well on our way, having collected $90,000 so far. The campaign will remain active until we reach our target, and I encourage everyone to get behind this great cause.
Alongside Kay’s efforts, we have super performers like Stewart Gordon and Chris Girling, who have excelled in sales over the last quarter across key markets like Castlecrag and Northbridge. In the last 12 months, Chris has sold 54 properties with a median sold price of $1.92M, making him realestate.com.au’s number one agent in Cremorne and Neutral Bay. More recently, Chris has been capitalising on the strong demand for townhouses and semis, securing several significant sales over the last quarter. Our other top performer, Stewart, successfully closed eight multi-million dollar deals in September alone. Their achievements reflect not only the thriving market, but their expertise in navigating it.
We recently hosted several successful events, including a VIP launch for the Kleo Display Gallery on October 16th and a Prestige Property Information Night on October 23rd, featuring industry leaders. These events provided a great opportunity to support our community, share valuable insights and further solidify our position as a leader in the prestige property market.
In a buyer’s paradise, it’s the behind-the-scenes efforts that make all the difference. With a committed team and a focus on community impact, we’re ready to turn challenges into opportunities for every buyer stepping into the evolving spring market.
We’ve already witnessed some exciting developments, and with the Mid Rise Planning reforms by Planning NSW expected to have further announcements in the coming weeks, there may be more.
Akoya Greenwich, one of our standout apartment living projects, recently snagged first place at the UDIA Awards for Excellence, spotlighting a growing demand for thoughtfully designed apartments that foster a sense of community. Many downsizers now revel in the convenience of apartment living, often wishing they’d made the switch sooner.
As buyers venture into off-the-plan purchases, as was the case with Akoya, the importance of reputable builders cannot be overstated. Developers are also increasingly stepping up by offering long-term insurance and warranties, providing peace of mind for those investing in premium apartments.
And for those in pursuit of premium – a new state-of-the-art display gallery has just opened in Neutral Bay by local developer WINIM, showcasing a premium selection of projects in one setting. Ray White hosted an Economic update by Chief Economist Nerida Conisbee on 16th October at this gallery, presenting an opportunity for buyers to engage with their future home like never before.
In Crows Nest, the transformation is palpable. With the new Metro Station on the horizon, the Canopy development – ten architecturally stunning terraces – will appeal to both families and downsizers alike. This area is going to thrive with new residents, restaurants and retail. So, if you haven’t experienced the Metro yet, hop on; it’s a ride worth taking!
As owners hit the pause button on listing quality properties in the Lower North Shore until the New Year, prospective tenants are left wading through a limited selection of high-end homes.
It’s a shame, because there is strong demand for high-end homes and properties in the $750-$850 range, especially around Neutral Bay. As a result, many furnished properties have received requests to be converted into blank slates.
Despite this, the current climate has empowered renters who are now applying for multiple listings with great fastidiousness. This newfound leverage is underscored by a marked decline in rent bidding, with offers reflecting the current market’s reality – particularly for homes that have been gathering virtual dust for over a month.
As spring unfolds without a corresponding spike in demand, many of these prospective tenants are browsing with a leisurely air, biding their time for the perfect opportunity. And, as many owner-occupiers purchase new homes but delay their move due to renovation plans or travel, there’s been an influx of short-term rentals, offering increased choice and flexibility for tenants already navigating a market increasingly tilting in their favour.
The leasing landscape in the Lower North Shore continues to thrive, with the recent arrival of tenants like Harry Hartog, White Story and Sydney Stretch Lab reflecting a market that is not only resilient but also adaptive to evolving consumer preferences and community needs.
September was particularly strong for commercial sales, with a diverse mix of investment and development properties changing hands. Notable sales and leasing transactions included:
The collaborative efforts of our team have been instrumental in securing these leases and sales, reinforcing the importance of personalised service in real estate. By continuing to foster these relationships, I am confident we’ll see a strong upward trajectory for commercial real estate in the Lower North Shore.
With the mortgage market shifting rapidly, it’s important for borrowers to stay sharp. Right now, fixed rates are the cheapest they’ve been, hinting that we might see a potential drop even further down the line. Many buyers are also smartly borrowing a bit more and stashing extra cash in offset accounts to prepare for any future rate shifts and to have a repayment buffer.
Meanwhile, refinancing appears to be taking a backseat as banks finally realise that it’s much easier (and cheaper) to keep their existing clients happy rather than chase new ones. This has created some competition, with banks now attempting to undercut brokers – who, unlike banks, actually have to prioritise your best interests.
Unsurprisingly, the majority of borrowers are, in fact, banking on brokers. In fact, we now hold over 75% of the market share, which means finding an A-list broker is now more important than ever to ensure they truly have your back.
In the Mosman real estate market, the July quarter auction clearance rates hovered around 50%, a sign of a market in transition. Historically, a clearance rate of 50 to 60% indicates stability, moving away from the rapid sales we’ve grown accustomed to during boom times. As we entered September, clearance rates edged up to around 60%, despite an increase in listings – a positive sign of resilience.
The key factor here is supply. We haven’t seen an explosion of new properties, which means prices remain stable. In the North Shore, the market tends to rise, plateau, and rise again, and right now we’re now in that plateau phase. This offers buyers unique opportunities, although the Lower North Shore isn’t known for bargain hunting.
Interestingly, across a spectrum of properties – from $600,000 studios to $20 million homes – active engagement relies heavily on accurate pricing. Properties that resonate with buyers’ rational expectations see a swift movement. If sellers can strike that balance in the first couple of weeks, they’ll often close a deal within a month.
The Law of Inertia states that an object in motion stays in motion (or at rest) until it’s compelled to change through an external force. In the Cammeray office, we’re seeing this principle in full effect.
We often witness a domino effect in property sales; when one house sells, it can prompt neighbouring homes to follow suit. Most recently, I’ve seen this play out on Amherst Street, where the recent sales of 77 and 69 have set the stage for the marketing of 104, proving that momentum in the market can lead to more action.
And we’ve certainly seen more action. This quarter, 48 properties have sold, edging past last year’s 46 in the same period. Among them, 11 houses and 37 apartments changed hands, with the median house price rising to $3,460,000 from $3,250,000 last year.
The market is being driven primarily by young families and downsizers across the Lower and Upper North Shore, many of whom are opting to secure properties before auction rather than entering into bidding wars, a testament to the area’s strong appeal.
As the time it takes to get from Crows Nest to Sydney’s CBD decreases (now just 7 minutes), property prices in the area are on the rise. The recent opening of the new Metro stations in Crows Nest and Victoria Cross have been a catalyst for growth, with properties near these stations already experiencing heightened demand. I’m expecting property prices to rise even further as buyers recognise the long-term value of living close to such critical hubs.
The relentless appetite for quality residential properties, particularly in Crows Nest, North Sydney, Kirribilli, McMahons Point, Waverton, and Wollstonecraft is a testament to the area’s attractive lifestyle and amenities. Both local buyers and investors are eager to capitalise on what these suburbs offer, with families and professionals alike lured by the unique blend of urban convenience and suburban charm.
In Kirribilli and McMahons Point, homes continue to fetch strong sales prices due to their picturesque views and proximity to the harbour. Meanwhile, Waverton and Wollstonecraft are seeing an influx of young families searching for larger homes and a more community-oriented atmosphere.
As we look ahead, the only thing moving faster than the Metro train is our optimism. The ongoing developments in infrastructure and local amenities, coupled with a strong demand for residential living suggest that the area will continue to thrive, and our team is well-positioned to guide buyers and sellers through this dynamic market.
Quality homes in Castle Cove, Castlecrag and Northbridge are flying off the shelves. Buyers are clearly on the hunt for properties that don’t just meet their needs but also have that elusive potential for value addition – preferably with a view.
There’s also been a surge in duplex developments, with brand-new builds now commanding around $5 million each. It seems everyone wants a (half) slice of that pie, and who can blame them? Duplexes offer both space and investment potential, making them the new gold standard in homeownership.
However, not all buyers are in a rush. Many are patiently waiting for the “perfect” property: that dream block in a good street, ripe with possibilities. This is where strategic matchmaking comes into play.
In today’s busy world, many families find it increasingly difficult to juggle house hunting with kids’ sports and other commitments, and so many are utilising the services of buyer’s agents. Whether you’re looking to upsize, downsize, or simply find that diamond in the rough, the insider knowledge and access to off-market opportunities that buyer’s agents possess can make them invaluable partners in the search for that perfect home.
If you would like any advice on the market, please get in touch with our team. We’re here to help.
As Sydney’s Lower North Shore prestige property market continues to evolve, understanding its key trends and both global and domestic economic drivers is crucial for buyers, owners, investors and industry professionals. Join us for an insightful evening where industry experts will dissect the dynamics shaping one of Sydney’s most sought-after … Read more
SAVE THE DATE We’re excited to invite you to an exclusive VIP event celebrating WINIM’s newly completed Display Gallery. Date: Wednesday 16th October 2024 Time: 6:00pm – 8:00pm Location: Level 2, 40 Yeo Street, Neutral Bay Please add this event to your calendar and stay tuned; your official invitation will … Read more