Source: TAWAR RAZAGHI, JOURNALIST, Domain
Strong buyer demand from first-home buyers and upgraders will help put a floor on property prices as the number of homes for sale drops in almost every part of Sydney, experts say.
While the city's property market recovery was in full swing by March, the coronavirus pandemic stopped it in its tracks by the month's end. The city's median house price rose 13.1 per cent to $1,168,806 in the year ending March 2020, according to the Domain House Price Report released on Thursday.
But in the weeks following, as the shutdown of non-essential services and temporary ban on public auctions and open homes took hold, the number of homes on the market dropped 12 per cent across the city compared to the same period last year, Domain data shows.
St George had the largest drop in listings, with a 31 per cent reduction in the number of properties on the market from March 23 to April 19 compared to the same period last year.
Next was the Sutherland region, which had a 26 per cent decline in listings year-on-year, followed by Parramatta, Liverpool and Fairfield, which all fell by 22 per cent.
Domain senior research analyst Nicola Powell said the number of sellers and buyers would reduce in coming weeks.
“Both buyers and sellers are reacting to the same conditions. A pull-back in both will keep a floor under prices,” Dr Powell said. “For prices to stabilise, we need a pull-back in listings otherwise buyers would be taking their pick.”
The Hills district also had a 18 per cent decline in properties on the market.
For Kellyville Ridge residents Rob and Jo-Anne Cascio, the sudden shortage of properties in their neighbourhood helped them sell their property for a fair price.
“There's a lot of demand for double-storey homes [like ours] but only single-level is available,” he said. “Because there are only a handful of double-storey houses listed, they don't have much to choose from.”
After passing-in at auction for $1.325 million, their five-bedroom property sold last week for $1.38 million.
The Agency North selling agent Sunny Gandhi said while buyers and sellers alike were cautious, demand was holding up.
“The buyers are still out there, there's actually a lot of buyers out there but there's not enough stock,” Mr Gandhi said.
“There are a lot of buyers hoping that the prices will drop but it's hard for me to say what is going to happen in the next few months … but I don't think they'll buy bargains.”
Meanwhile, a handful of regions bucked the downward trend with a strong rise in the number of properties for sale.
The northern suburbs saw a 10 per cent rise in listings, followed by the northern beaches (9 per cent) and the lower north shore (2 per cent).
All three recorded double-digit year-on-year house price growth; the northern beaches rising 18.6 per cent to a median of $1.97 million and the lower north shore rising 16.6 per cent to $2.623 million.
AMP Capital chief economist Shane Oliver said many home owners in these regions would be less affected by the economic downturn caused by the pandemic and would see it as an opportunity to upgrade instead.
“There's probably less uncertainty hanging in their financial future and they feel confident to put their house on the market and using [this downturn] to upgrade,” Dr Oliver said. “There are still pockets of Sydney that are still doing reasonably well.”
He said many would acknowledge that while they might sell slightly cheaper, they would also be upgrading for a cheaper price too.
Clarke & Humel Property selling agent Michael Clarke said the northern beaches had fared well due to strong interest from locals and overseas buyers.
“People are seeing it as a wonderful opportunity to upgrade,” he said. “Sellers are conscious of what they read in the media. Subsequently they're open-minded about their expectations.
“Manly and the lower northern beaches seems to be quite insulated because we're getting interest from the area and overseas.”
The inner west had the largest increase, with median house prices rising 21.5 per cent over the year ending March 2020 to $1,700,500, but listings in the region have dropped 19 per cent since the end of March.
McGrath Newtown agent Adrian Tsavalas said buyers were desperate to seize on opportunity.
“The initial shock of COVID has passed and there's such a lack of stock [in the inner west] on the market at the moment that prices are remaining stable at the moment,” he said. “Buyers that were initially saying 'I'm going to wait until this is all over' are back in the game.
“First-home buyers are still very active in the market, bolstered by government incentives; the circa $650,000 range is still very strong in the inner west.
“The lack of supply is still holding prices very strong.”