Sydney house prices reach record high, outstrip pre-pandemic levels

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Kate Burke| Sydney Morning Herald| 28 January 2021

Sydney house prices reach record high, outstrip pre-pandemic levels (domain.com.au)

Sydney house prices have reached a record high and outstripped pre-COVID-19 prices by nearly $50,000, with median prices jumping by six figure sums across in-demand pockets, new data shows.

Sydney’s median house price is now a whopping $1,211,488 after surging by 4.8 per cent during the December quarter alone, the latest Domain House Price Report, released on Thursday, revealed.

This well surpasses Sydney’s pre-pandemic house price median of $1,161,864, and tops the property market’s mid-2017 price peak by $13,000.

Apartment prices have also stopped falling, with the median nudging 0.2 per cent higher to $729,840 – still $20,000 short of the median recorded in the pre-pandemic March quarter.

The strong end to the 2020 property market proved the resilience of Sydney house values, Domain senior research analyst Nicola Powell said, with prices rebounding after a short-lived 2.2 per cent dip mid-year.

“Government support measures, a remarkable recovery in consumer confidence, the successful containment of COVID-19 outbreaks and the pessimistic outlook for property prices failing to materialise have played a role in supporting market activity and prices,” Dr Powell said.

The pullback in buyer and seller activity during the initial market shutdown also helped support values, Dr Powell said, as did record low interest rates, which fuelled buyer demand and eased mortgage repayments.

She said buyers had quickly snapped up the growing number of houses for sale in the second half of the year, creating strong competition and driving prices higher.

HOUSE PRICE MEDIAN
RegionDec-20QoQ ChangeYoY Change
Northern Beaches$2,050,0008.8%10.1%
Upper North Shore$1,950,7507.2%7.2%
Inner West$1,730,0005.8%3.3%
North West$1,395,8005.7%6.9%
Central Coast$710,0005.2%12.7%
South$1,264,0004.6%4.0%
South West$735,0004.3%4.3%
West$765,0003.4%7.1%
Blue Mountains$725,3972.9%9.1%
Canterbury Bankstown$950,0002.1%4.6%
Lower North Shore$2,583,500-2.1%-0.6%
City and East$2,475,500-3.9%3.6%
Source: Domain House Price Report, December Qtr 2020

The northern beaches saw the strongest quarterly growth with the median house price jumping $165,000 to a record $2.05 million.

It was among six regions where house prices reached a new record, with house medians in the upper north shore, north-west, city’s west, Blue Mountains and the Central Coast also reaching new heights.

Sydney’s rapidly rising house prices are likely to bring the affordability debate back to the fore. While the strengthening market was good news for existing homeowners it would make it harder for first-home buyers trying to get onto the property ladder, Dr Powell said, but noted the impact would be eased by historically lower interest rates which gave them access to cheaper credit.

“When prices are rising that obviously does push the savings goal further away for first-home buyers and makes it harder for them to gain access to the market,” she said.

Dr Powell added it was some of the most affordable markets, like the Central Coast and Blue Mountains, which had seen the largest annual house price gains.

UNIT PRICE MEDIAN
RegionDec-20QoQ ChangeYoY Change
Northern Beaches$965,0003.8%2.1%
Upper North Shore$767,0002.6%-4.7%
Lower North Shore$965,0001.6%-2.1%
City and East$960,6031.1%-3.9%
Inner West$780,0000.6%1.0%
South$700,0000.0%0.0%
West$550,000-0.9%-1.8%
Canterbury Bankstown$525,000-2.6%-3.7%
South West$464,000-3.3%1.4%
North West$683,750-5.0%-5.7%
Central Coast$507,000-6.1%5.6%
Source: Domain House Price Report, December Qtr 2020

Selling agent Georgi Bates of Cunninghams Real Estate said demand for the northern beaches was driven by locals looking to upsize and buyers from the eastern suburbs, inner west and lower north shore looking to upgrade to larger properties in lifestyle locations as they continued to work from home.

Expats were also looking to the region, with Ms Bates noting that she sold a seven-bedroom house in Freshwater for $3.75 million prior to auction – and site unseen – to a US-based buyer.

She said the recent lockdown on the northern beaches had, if anything, created more demand from locals home owners realising they wanted more space.

It was a similar story on the upper north shore, said buyers’ agent Henny Stier, principal of OH Property Group, who was seeing strong interest for family homes from buyers across Sydney, with one open home on Saturday drawing 110 groups.

“That’s an abnormal market,”  she said, adding property price guides were increasingly falling short of what buyers were prepared to pay.

Ms Stier said the sharp rebound was forcing house hunters to once again compromise on their criteria, with many surprised they couldn’t get a deal despite the ongoing pandemic.

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