5 Property Trends To Watch This Spring
2022 has been an unusual year for the Upper North Shore property market. After a year of record growth, property prices started to come off the boil. But at the same time, the rental market is tighter than ever, with vacancy rates back to levels not seen in almost a decade and rents now growing fast. We look at what’s happening and why and reveal our five trends to watch out for this Spring. More properties to hit the market (but not as many as usual). As we wrote earlier this month, Spring is traditionally the selling season here on Sydney’s Upper North Shore. As a result, a lot of properties usually start to hit the market, with listings traditionally peaking in October and November, according to data from SQM Research. In line with this trend, we’ve definitely seen more properties hit the market in September - giving buyers more choice than they had over Winter. But, then again, we haven’t seen quite as many homes come online as we usually would at this time of year. This is helping cushion the impact of generally lower demand, meaning that we’re not necessarily seeing the price falls here on Sydney’s Upper North Shore that are being reported across the city more generally.
1. Declines to slow
Speaking of which, since the market peak at the start of this year, the median Sydney home value has fallen by -5.6%, according to CoreLogic. The pace of decline has actually been speeding up over the year, with August seeing the largest fall of -2.3% in just a month. Our view is that prices will soon flatten out. After all, the main reason for market declines has been rising interest rates. A lot of people we’ve been speaking to say that they still intend to buy or sell, but they have been waiting to see where interest rates eventually land. Although the official cash rate went up another 0.5% this month, the RBA has said that any future rises may not be as aggressive. If that’s true, it may be enough to give more people the confidence to make their next move. e.
2. Rents to keep rising
While the sales market may have been slower lately, the same can’t be said for the rental market. In fact, it’s now as busy as it has ever been. According to data from SQM Research, the Upper North Shore vacancy rate of just over 2% is the lowest it has been since 2018. The result of this is that we’re seeing rents rising sharply. Over the past two years, the median rent on an Upper North Shore dwelling has increased by 27.4%, from $567 to $716. Given the current demand we’re seeing for rental properties in our area, the rental market will tighten even further this Spring.
3. Investors to come out in force
With Upper North Shore property delivering better yields, we’re seeing more investors enter the market. But that’s not the only reason you’re likely to find them very visible when you visit your next open home. Property investing is a long-term play, and many of the most astute investors wait until the market is quiet before adding to their portfolios. That’s because they have greater choice and can often buy with less competition. So if you’re holding off buying because you’re waiting until the market turns again, our advice is to follow the lead of investors, and enter the market sooner rather than later.
4. Lifestyle to dominate
Finally, one of the big trends we’ve been witnessing over the past couple of years has been the growing demand for lifestyle properties. With more people working from home and spending more time at home, having space to move has been a top priority. Our leafy streets, large blocks of land and substantial family homes mean the Upper North Shore has been a high-demand area.
Where we’re really seeing this trend play out now is in the northernmost parts of Sydney. Those suburbs adjacent to Ku-Ring-Gai National Park and the Hawkesbury have been experiencing record growth despite the recent market, with suburbs including Berowra (up 22.3%), Asquith (up 28.7%) and Mt Colah (up 28.4%) still registering substantial gains over the past 12 months.
We expect these parts of the Hornsby Shire to outperform the market this Spring, as lifestyle continues to be the main factor influencing people to make a move.
If you’re interested in finding out more about the property market on Sydney's North Shore, get in touch.
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