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2021: Must-know Property Trends for Sydney Buyers

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It’s time to talk trends. If you’re thinking of buying in Sydney this year, here are the top 5 trends you need to know, so you can make a smart property investment.

ONE. COVID-19 DIDN’T HAVE THE IMPACT MANY THOUGHT IN 2020.

Last year, property investors looking to buy in Sydney were rubbing their hands together waiting for the massive slump in the market. Unfortunately for them, it didn’t happen. While the market did dip for a short time when COVID first put us in lockdown, it recovered fairly quickly. In fact, later in the year property prices actually increased. Go figure. According to realestate.com.au data, the median apartment price in Potts Point in December 2020 is now $790,000 – 8.6% higher than at the start of the year.

And that’s not an isolated case. Sydney’s beach suburb prices also increased. In Bronte, apartment prices rose an impressive 15.3% to $1,257,500, while houses lifted 5.8% to $3.4 million. Another key driver indicating market performance also rose –  auction clearance rates rising. The eastern suburbs auction clearance rate was 75% – the sign of a strong market in which prices are heading up.

So sorry to say clever investor, your hopes of a drop and then a 2012-2017 style property increase doesn’t look to be promising. Keep this in mind when you’re shopping around.

TWO. INTEREST RATES WILL STAY LOW FOR QUITE SOME TIME.

If you’re ready to borrow, the good news is the interest rates are going to stay low for a while. Last November, the RBA cut the cash rate to 0.1% – and it’s not expected to lift for 3 years. So borrowing is also going to be cheap for that length of time – maybe longer.  Major lenders are offering interest rates at below 2%. That’s a nice price for home buyers.

THREE. STAMP DUTY IS LIKELY TO CHANGE SOON

This is great news for people in NSW with the cost of stamp duty being through the roof here. In November last year, the NSW treasurer announced the state government would put an end to one of the biggest obstacles to buying a home in this fine state. It’s likely that at some point in the first half of this year, we can expect stamp duty to be replaced by a yearly property tax. New buyers will have the choice to decide between paying stamp duty or to pay property tax in the new system. The choice will probably be pretty simple – the amount we pay for stamp duty here is a little outrageous. The idea is to make it easier for buyers to enter the market – giving them more money to put towards their property – not in the Government’s pocket. The only downside of this is it could potentially push property prices up. Get in early, get a good seat.

 

FOUR. FIRST HOME BUYERS ARE BACK…INVESTORS ARE HOLDING (JUST).

Good things did happen in 2020. For one, the Government really did their best to help first home buyers enter the market. And enter the market they did. A range of Government grants and incentives were taken up for first home buyers in droves – things like stamp duty exemptions, first home owner grants and deposit guarantee schemes (no need to pay mortgage insurance), made it so much easier for buyers to enter the market. Combining these benefits with low interest rates made it cheaper for first home buyers to buy than rent! In December 2020, the ABS reported the growth in first home buyer loan commitments post-COVID-19 was higher than at any time since 2009.

Of course, when there are winners, there are losers. Property investors were not quite as fortunate as home buyers in 2020. Landlords were having to charge lower rents with border closures, Airbnb rentals being in limbo and overall lower population growth. Fewer investors were game to enter the market with such uncertainty. The last few months of 2020 saw this investor slow-down begin to pick up pace once again. It’s anticipated that investors will add to the buying market with more gusto this year as COVID-19 market uncertainty is firmly left behind in the year 2020.

FIVE. THERE ARE STILL GOOD BUYS ON THE MARKET

Even though we didn’t see the slump expected, there are still good buys out there. Just be prepared, do your homework and keep your eye on the market….And when that opportunity presents itself, act fast! And even if you do feel the price is high, remember it’s Sydney. Prices rise significantly over 10 years here – in some cases almost double or more! You can’t go wrong with Sydney’s Eastern suburbs. If you have the money, get in there. If you feel stuck with where to buy and how to find a good bargain engaging the expert services of a property buyer’s agent , such as yours truly, may be your best investment in 2021.

THINGS ARE LOOKING GOOD.

While you may not be finding bargain basement prices, all round there’s definitely some optimism in the market and overall, that’s good for everyone. We all want Australia to get back on track and it’s looking very promising indeed. Happy days.

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