Several property trends have re-shaped the market in Sydney’s eastern suburbs over recent years.
From surprise election results to the explosive growth of Airbnb and green homes, we explain the key trends any buyer or seller needs to know in 2019.
1. The elections
2019 has been a year of two elections for Sydney property buyers and sellers.
Generally, with both State and federal elections, buyers and sellers tend to either get in early with a sale or purchase or put it on hold until after the election result is known.
This year, however, we’ve seen more of the second approach. In particular, there was a period of significant uncertainty leading up to the 18 May federal election, as the two major parties took very different policies into the campaign, especially when it came to real estate.
Because people took a “wait and see” approach, we saw a real lull in the property cycle. For example, according to Corelogic just 270 properties across Sydney went to auction on election weekend, compared to 672 on the same weekend a year ago.
With the elections now out of the way, and a Liberal Government re-installed, we expect to see greater confidence return to the property market.
2. The impact of lending restrictions
You can’t talk about property trends without mentioning the changes to lending, which came about as a reaction to the Royal Commission into Banking. In the lead up to findings being handed down, banks tightened lending criteria and increased their scrutiny of factors such as living expenses for loan applicants.
This resulted in banks lending less to prospective borrowers, so buyers had less to spend, with obvious flow-on to vendors, who had to choose to accept a lower price than they’d hoped for or try to hold out.
This meant we started seeing properties facing more days on the market and, in many parts of the market, flattening or declining prices.
That said, to date the prestige market has been largely unaffected by restrictions, with cash buyers over-represented in the market for properties above $10 million.
3. Downsizers out in force
Downsizers continue to have a big impact on the market in many parts of Sydney’s East, especially in well-connected and vibrant areas such as Paddington, Bondi, Double Bay and Potts Point. These buyers have often just sold the family home and now want a change of lifestyle.
In recent years we’ve observed a new breed of downsizer: the prestige downsizer. These buyers have substantial budgets, usually pay cash and have high expectations about what they want from their home.
The main problem for prestige downsizers is that there simply isn’t enough stock to meet their demand. This has kept prices high and competition strong, even during a sluggish Sydney property market.
4. Apartments appealing to a broader demographic
No longer considered just a starter home or a safe option for singles and downsizers, apartment living is becoming a major eastern suburbs trend.
From young families to early-stage downsizers who still have teenagers at home, apartments now appeal to a much broader cross-section of buyers and we argue they could even be the new family home.
5. School catchment zones matter
School catchment zones, and walkability to the east’s many private schools, can make or break a sale. In fact, these factors now dominate the thinking of many buyers looking for a new home.
Because of this, school catchments don’t just matter for buyers. Sellers with family-friendly homes should be aware of their impact in any sales campaign. After all, being in the “right” catchment zone can add serious money to the value of your home.
6. Increase in short-term rental properties
We now talk to many clients looking to capitalise on their granny flat or investment property on the short-term rental market. We’ve also seen the rise of the Airbnb investor-buyers.
These buyers often look to purchase a beachside or well-located unit with a view to turning it into a short-term rental, either full-time or for several months of the year. Because of this, in 2018 The Agency entered into a partnership agreement with leading short-term rental company MadeComfy, who offer an end-to-end tech-driven Airbnb management service.
7. Homes going green
Increasingly, one of the more common questions we get asked by at open homes by prospective buyers is: does it have solar energy?
Solar panels are in demand from buyers, particularly in larger homes where there can be significant cost savings from running aircon and pool filters from solar panels.
Going green could make a real difference to whether or not a property sells and how much it sells for. So if you’re thinking of listing in 2019, it could be what separates your property from the pack.
If you’re looking to buy or sell in Sydney’s eastern suburbs contact our team today.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.