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6 Predictions for Lower North Shore Property in 2020

Updated: Aug 20, 2020

Post the federal election, Banking Royal Commission, easing credit access and record low interest rates, what does Sydney's LNS property market hold in store?



A strong start


2019 was a big year in Politics, Policy and property! Following the end to the Banking Royal Commission, ScoMo’s win; and multiple RBA rate cuts, buyers again got excited; however, there was nothing to buy! So, this cocktail of perfect demand conditions and low supply translated into FOMO (Fear of Missing Out), which drove-up auction clearance rates and in turn, property values! In fact, 2019 delivered the strongest final quarter to a year that we can ever recall! Dwelling values are back into positive annual growth territory for the first time since early 2018.


The start of a new year always begins optimistically, and this is likely to be especially so in 2020 given the recent lift in the market. Many buyers are now keen to get into the market before prices continue to rise too much more.


More first home buyers in the market


Whilst FHB are rare in Willoughby CC, new help for first home buyers, combined with falling prices in 2018, is seeing a surge in first home buyers entering the Sydney property market, hitting a six-year high of 29.8% in terms of new borrowers in August of 2019, according to CoreLogic’s latest Home Value Index. With further fiscal stimulus expected for this demographic in 2020, it’s likely we’ll see these numbers continue to grow.


Investors return to the market


Various factors are encouraging investors back into the market, including: confirmation of Liberal-National government; interest rate cuts; and easier access to credit following the conclusion of the Royal Banking Commission. All-in-all, property investing is again becoming attractive.


An increase in stock


If there was one key feature of the property market in 2019 it was a lack of stock. In fact, ‘under-supply’ has defined the market since 2017 (Note WCC property sales vs the LT average: 2017 = 75%; 2018 = 67%; 2019 = -35%). So, while low stock could persist, sooner or later, the reasons why people sell (eg upsize/downsize/relocate/etc) are backing-up and will start to become urgent. This reflects the increasing number of conversations that I (and my North Shore colleagues) are having with local owners.


Downsizing


We’ve seen a jump in families opting to downsize earlier in life (ie as soon as kids leave school or uni!) electing for a more cosmopolitan and carefree lifestyle! We expect this to continue in 2020. As a result, we’re seeing strong demand for prestige down-sizer apartments that offer low maintenance, good transport links and plenty of lifestyle amenities.


A strong luxury home market


Sydney remains the most desirable (expensive) city to call home in Australia and Australia remains one of the most desirable countries to live in. This will ensure upward pressure on property values for generations to come. The prestige property market in Sydney ended the year on a high note after a slower start to the year than usual. We expect the confidence gained over the last quarter to continue with a strong market for properties in the $4M+ price range.

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