Insights

Tools, tips, industry knowledge & market trends.

The property market has been impacted by a multitude of dynamic forces since the pandemic commenced. The subsequent knock-on effects are wide ranging and unexpected in many instances.

In this special report, we highlight the 11 most discernible trends in the 2021 Sydney property market that have come about as side effects of the pandemic and the ongoing response to it. As you read through the report, you may find some of the points contradict. Given property markets vary from suburb to suburb and region to region, some of the trends are location based.

Interpreting real estate agent’s respective price guides during the 2021 boom has become harder than earning enough money to purchase a property.

The frustrating reality for buyers is each real estate agency tends to take a different approach on how they price their respective listings in the marketplace.

There are a few common ‘price strategies’ agents adopt that are worth being aware of:

Consolidating the house price gains, apartments improve

The Sydney housing market continued to power right through April, with record prices being achieved on a near weekly basis. Property markets can often commence the calendar year in optimistic fashion, as a lack of stock over the summer creates pent-up buyer demand.

The first quarter of 2021 was one of the most remarkable on record, with house price growth running at all time highs.

As real estate agents, we are often asked, ‘How’s the market?’. That question has morphed into ‘Why is the market so strong?’. No one expected a crash in Q1 2021 but few expected the explosive growth that occurred.

A little quoted element of the current housing boom is the number of homes that sell prior to auction. When auction clearance rates are quoted as being at 80% and even 90% some weekends, one can understandably conclude that these sales are under the hammer.

However, a review of the weekly auction results will show that each week around 40% of the successful auction results actually sold prior to the auction. Once the unsuccessful campaigns and the properties sold prior to auction are tallied up, it becomes obvious the minority of auction campaigns actually sell under the hammer.

The property market has opened 2021 up in surprisingly strong fashion. It’s not that market pundits expected a soft start to the year, it’s just the strength in certain segments of the market has completely surprised most people. There is a case to say that certain niche markets have jumped by nearly 10% since Christmas. Whilst that seems close to unbelievable in a mere twomonth period, there is mounting evidence each week that removes any doubt.

In this special report, we break down the issues that property sellers should consider, prior to listing their property in 2021.

In the smash comedy hit movie, ‘Meet the Fockers’, Robert DeNiro plays the Father-In-Law from hell. If you are like Greg Focker and have crazy In-Laws like De Niro’s character Jack Byrnes, the good news is you probably don’t have to live next door to them, someone else does.

You can avoid crazy In-Laws a lot easier than you can avoid crazy neighbours.

The one question home buyers often fail to consider – who are the neighbours, and will we be able to liveharmoniously next door to them?

Once the decision to sell a property has been made, the next question is usually “when”?

Stock levels (demand) play such a crucial role in the performance of a real estate market.

There are predictable periods (trends) throughout the calendar year when experienced market operators know stock levels will be tight and other times stock levels will be elevated, inadvertently favouring buyers.

In normal times, there wouldn’t be a need for a market update in February, as the market unofficially closes or winds down between late December and late January. However, this summer, with state borders closed and the world at large upside down - buyers, sellers and real estate agents simply stayed home and transacted property throughout.

Harris Partners sold four properties in the few days leading into Christmas in a sign of what was to come. Buyers clearly felt more confident in this new pandemic world and were in a bullish mood on the back of record low mortgage rates.

‘So, what do you think this place is likely to fetch?’ It’s the question every agent expects to answer when pitching for a new listing. How the agents answer this question should be more important than what they answer.

When interviewing agents, many people unintentionally favour the agent that quotes the highest price. This sets up a scenario where they overlook pertinent details of the agent’s appointment, issues that seem insignificant at the time of signing the agency agreement.

In a boom, a low price guide attracts an excess of bidders who all compete vigorously for the property. The sellers end up with a satisfactory price, one buyer gets the home and there are many devastated buyers who line up to have another go next weekend.

What happens when the price guide doesn’t attract the promised crowd of bidders? The pain of underquoting is transferred to the seller.

The 2021 Sydney property market will be a case of dynamic forces pushing and pulling prices higher or lower. How the 2021 market fares and where it finishes on December 31, 2021 is anyone’s guess. To stay attuned with the market movements, it’s worth identifying the dynamic issues that are likely to determine the result.

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