August Property Market Update
With the Sydney Lockdown extended, the property market continues to operate with severe restrictions. But that's not to say that investors with the patience to wait for a market change are out of luck. Prices remain high and rental incomes continue to be strong, making stagnant markets ideal for first home buyers looking for more than just a place to live.
But before you make any decisions, let's talk about exactly what you can expect from the market this year and what effect the Sydney Lockdown has had on prices and demand in your area.
1. With the Sydney Lockdown extended into September, the property market continues to operate with severe restrictions. The NSW Government has extended the Lockdown from its original commencement date of 15-18 May, indefinitely. This means that no new residential allocations are being released by the Government and existing properties continue to be resold with no new release until some time in October at the earliest.
2. The Sydney Lockdown is not likely to have a large direct impact on your suburb, but it will slow down price increases for certain suburbs and areas. The Lockdown will slow down the pace of property appreciation, making it harder for suburbs to see growth above the inflation rate of 2.2%.
3. In regards to rental yields, your suburb will still experience strong yields, but rental yields are likely to fall slightly and rent prices may increase slightly as the market recovers from this temporary slowdown. So if you're trying to decide between buying or renting in your area, it looks like renting is still the better option.
4. First home buyers may not want to sit around too long in a stagnant market waiting for conditions to change. If you're a first home buyer, this means that now is the time to make your move. The price growth in some suburbs has slowed, but property is still expensive. But if you're confident in your ability to negotiate and be flexible with your finances, now may be the time to make a move.
5. If you're looking for more than just a place to live, this may not be the best time to get into property. The rental market is strong and rents are unlikely to fall any further, making it difficult for investors looking at property as an investment option. If you're looking for profit or an income stream from property investment rather than a place to live, then now might not be the best time either.
6. Sydney is recovering slowly from the effects of Covid and recovery is likely to continue to be slow. In most suburbs, property values still remain significantly higher than they were pre-Lockdown. Some suburbs have seen very little change, while others have seen some growth reflecting the slower pace of recovery in Sydney.
7. If you're a first home buyer looking to buy now, remember that it's still expensive . With prices having risen significantly over the past 12 months, many first home buyers are struggling to afford a property in their preferred suburb or area. But with the Lockdown still in effect, prices are not likely to fall significantly lower now. So if you're looking for a place to live and don't have a specific area in mind, the best option might be to wait for the Lockdown period to end.
8. If you're a property investor, this is probably not the time to increase your exposure or bet on a price rise. Prices are generally high and there are few other credible options on the market. This will continue to be an expensive market until further notice, and it's unlikely that prices will fall much lower before interest rates begin increasing again later this year or early next year.
9. If you're looking to buy property in areas where prices have fallen, it's possible that prices will bounce back faster. Areas like Hornsby, Mount Druitt and Lane Cove have all seen sharp declines since the beginning of the year and are now showing signs of recovery. If you're a buyer who has already bought into these areas and don't want to wait around, consider looking at these areas for a potential property investment or rental purchase later this year.
10. If you're renting you probably won't need to move if the Lockdown continues through November. Most renters live close to the CBD or a fast growing area such as Parramatta, Strathfield or Bankstown where property prices are expected to continue rising.
11. If you're a first home buyer looking for a suburb that has already seen some growth but doesn't require major renovation work, it's likely that your preferred suburb will continue to grow over the next 4-6 months. It's possible that areas like Marrickville and Surry Hills could see further growth as more valuation data is released and values are revealed through revaluations.
12. If you're a buyer looking to make an early move in areas where price growth has levelled off or slowed, then this is probably not the best time to buy.
13. If you're thinking of investing in property, then there are still some good suburbs left to buy into before they climb and prices settle. There's no need to wait for prices to fall even further when there are hundreds of suburbs with strong rental potential and low vacancy rates that have not yet reached their peak price levels. Speak to us directly to discuss areas that might be right for you.
14. And for those who wanted to put money into property last year, but couldn't because of a lack of available finance? Now is the time for you to come back in . The banks are more willing to release finance for property than they have been in over a decade. With many new developments on the horizon in Sydney, now is the time to get into the property market.
15. Property prices are likely to continue rising, but at a much slower pace than we've seen in recent years . The Lockdown could potentially be extended again later this year, which means that there's no guarantee that prices will recover significantly higher than their current levels (although they will recover). There's no need to wait around hoping for a change in conditions.