NSW Real Estate During COVID-19
During the last few months, we’ve experienced several noticeable shifts in the way the global and local markets and market sentiment have reacted to the pandemic. But, we’re navigating new, uncharted territory, so this is understandable. It’s also comprehensible that the uncertainty would send shockwaves through entire industries. As you would expect, real estate hasn’t been spared the choppy territories and waters that have ignited due to COVID-19. However, the effects of COVID-19 on real estate have been surprising and, in most instances, contrast what was expected or universally accepted at the start of the pandemic.
In NSW, especially, the effect COVID-19 has had on the market displays is a testament to how resilient and valuable NSW real estate is.
The Three Figures That Make NSW An Attractive Market
No one can refute the data that reveals the resilience of the NSW real estate market. This data has been most influential in concluding that for buyers and investors, there’s no better place to purchase property than in NSW. This resilience can be attributed to a handful of statistics that define the NSW property market.
House Sale Prices
Both units and houses are seeing a swell in value. The year-on-year house prices for Sydney increased by 6.8%, quarter-on-quarter those figures were 1.2%, But strangely there are even weekly changes. In the final week of October, Sydney’s rental market experienced a 0.1% increase in rental demand.
All of these figures point to a resounding resilient NSW real estate market.
Days on The Market
When COVID-19 first became an apparent threat, the days on the market drastically – and quickly – increased. However, just as those numbers rose, they’re quickly decreasing to pre-COVID-19 levels. The speed at which a property’s days on the market stats are normalizing to figures before COVID-19 is astounding.
Housing Supply
Sydney’s supply has decreased by 7.4% year on year, making the housing market more competitive. These statistics can be beneficial to both the buyer and the seller as they display how robust the local market is.
But, ultimately less supply means buyers are compelled to buy, and sellers have an incentive for listing as they know they’re more likely to sell their home than before.
How External Statistics Directly Impact NSW Real Estate
But, the above statistics aside, probably the most accurate determiner of how the NSW market will respond has to do with what happens outside of the real estate market. For the most accurate predictions, it’s imperative to consider the housing market as a part of a connected ecosystem.
An ecosystem that has changed and progressed due to COVID-19.
Attractiveness for Migration
Australia is becoming a hub for the world’s innovators, thought leaders, and businesses, drawing the attention of professionals – across a variety of industries – as both an attractive area for investment, a haven for innovation, and an ideal destination to raise a family. Over the last few years, migration to the country has experienced a steady increase. In 2019, migrants made up 29.7% of the population, for a total of 7.5 million migrants.
But these figures are set to increase, and with it, they’ll bring a renewed interest in local properties. The driving force of this change? COVID-19.
COVID-19 is causing many to question their choices of where they choose to take root. These questions culminate in a logical conclusion that there may be a better or more viable economy, legislation and prospect when in Australia.
As a result, COVID 19 is accelerating Australia’s attractiveness among the world’s professionals, essentially increasing demand for real estate.
This additional migration also means that the economy is receiving a healthy dose of investment capital, which creates a loop effect. Because by increasing employment opportunities and making housing more accessible to Australians.
Record Low-Interest Rates
Since the start of the year, the RBA has cut the interest rate by 50 basis points. Essentially, shattering every record for the last 50 years. And as the RBA considers additional methods to revive the economy, it’s possible that the record-breaking 0.25% interest rate could be further reduced. Ultimately, there has never been a cheaper time to purchase a home, nor has there been a more savvy time. Considering Sydney’s housing market experiences a 7% property price increase year on year, your home value will far exceed the amount you owe the bank.
This is something first-time buyers and investors are taking a keen interest in, as it could effectively add a few thousand to their net worth in a matter of months, but over the next few years could add 5 even 6 figures to their net worth.
Fast Tracking Remote Work Trends
Over the last decade, employees working remotely have increased by 159%. Historically, remote work has affected the choices employees make regarding their residence. However, COVID-19 has accelerated the speed at which companies adopt remote work strategies, therefore, increasing the number of individuals looking to invest in prime real estate because they want to prepare themselves for a long-term work-from-home environment.
Birth Rates
Australia is finally reversing years of steady birth rate declines – and other major real estate investing nations like China – experience a minor resurgence in births.
Birth rates are crucial for population growth, as reports have stated that falling rates could be the next economic threat.
But in terms of real estate, a higher birth rate means more couples are searching for an ideal living environment and more stability for their growing family.
When you consider that COVID-19, in the space of a few short months, has had such a drastic impact on our property market, it’s reasonable to assume that, going forward, those effects will have a ripple effect on every facet of our lives, including real estate.