NSW is at the epicentre of Australia’s latest major COVID outbreak and is facing a large near-term shock.
And obviously this will affect Sydney’s property market.
Sentiment is glum and vendors are holding off placing their properties on the market for sale
Prospects of a more urgent, accelerated vaccine roll-out are about the only ‘silver lining’ to the dark clouds surrounding the state’s current situation.
NSW consumers: housing–related sentiment
For housing, the strength of the state’s housing boom coming into the lock-down market is indisputable.
Turnover soared to a 19yr high in July to be 45% above pre-COVID levels with price growth set to hit 20%yr in August.
In fact prices and auctions have been surprisingly resilient during the current lock-down.
NSW housing composite vs turnover
The more granular price detail for Sydney did show some tiny pockets of weakness in July – unit prices dipping slightly in a couple of areas in the city’s South and West hit harder by the outbreak (notably Fairfi eld).
This was way more than offset by strong gains across the wider metropolitan city, albeit with a clear moderation in month-to-month gains for ‘top tier’ properties from the explosive increases seen at the start of the year.
Regional NSW has also seen strong momentum but with a slight moderation in outperforming Byron Bay.
Demand continues to run well ahead of on-market supply – with sales outstripping new listings by about 20% and the number of listings well down to just 1.8mths of sales (although both metrics are now being disrupted by lock-down shifts).
Rental vacancy rates also posted a notable drop in July.
The NSW Consumer Housing Sentiment index points to slowing momentum near term.
The key driver looks to be a sharp fall in views on ‘time to buy’ as affordability pressures bite (note that in chart 23 and similar charts for other states both the index and turnover are shown in annual change terms rather than levels).
Sydney dwelling prices
NSW: dwelling approvals, vacancy rate
Source of charts and commentary: Westpac Housing Pulse – August 2021