Green Square and Waterloo Real Estate Update: December 2021

2021 has been a great year for Sydney property.

Despite a resurgence of coronavirus, a 16-week lockdown, increased restrictions, closed borders and general economic uncertainty, the median Sydney dwelling price lifted 25.8% over the past 12 months, according to CoreLogic.

To put that into some kind of perspective, it is the highest rate of growth the Sydney market has experienced in more than three decades.

So how did our local area fare? What trends did we notice? And what should we expect for 2022?

Houses outperform the median in our local market

One of the first things worth mentioning is that the general pattern of growth across Sydney’s property market did not impact all market segments in quite the same way. CoreLogic data reveals that the median Sydney house price rose at a rate exactly double that of apartment prices – 30.4% for houses compared to 15.2% for units.

Locally, we saw house prices in Waterloo rise 28.6% over the year, according to realestate.com.au. Meanwhile, Domain data shows that the value of three bedroom houses in Alexandria rose 18.8%. This was the result of strong competition in the local housing market this year. For instance, when we listed 345 Belmont Road, Alexandria, it became the subject of significant interest, selling for $2.462 million.

We noticed that this trend was largely driven by upsizers, who were looking to move from an apartment into a larger property – often to accommodate a home office or extra living space. This same trend also impacted the market in three-bedroom and larger two-bedroom apartments.

At the prestige end of the local market, we also saw upsizers joined by downsizers who had recently sold the family home, generating further competition still. The strength of this segment can be seen in the number of record sales over 2021, including 1102/2 Cowper Street, Glebe, a three-bedroom penthouse in the ‘Mezzon’ complex, which sold for $3.1 million.

The return of the investors

The entry-level property market wasn’t quite as active. Closed borders meant far fewer overseas students and this led to higher vacancy rates and flat rents. As a result, many investors stayed out of the market, preferring to put their money elsewhere until conditions became more certain.

After lockdown, however, we noticed a definite change, with investors returning to the market in a more obvious way to take advantage of strong potential yields. In fact, the median apartment yield for most suburbs in our local area is significantly higher than the Sydney average, as the table below shows.

Area Median apartments rent p/w Gross median yield apartments
Sydney overall $483 3.0%
Alexandria $530 3.4%
Waterloo $600 3.5%
Beaconsfield $610 3.4%
Source: realestate.com.au

The influence of investors in the market is borne out by ABS data which reveals investor lending rose almost 90% between October 2020 and October 2021.

Thinking of selling?

Just researching the market?

Are fears of an overpriced market overblown?

While the Sydney property market may have had a record year, the reality is that much of the growth has been fuelled by low-interest rates. As we mentioned in our October market report, it has become comparatively affordable to buy an apartment compared to renting one – especially if it has only one bedroom.

Thanks to these same low-interest rates, it is now actually cheaper to buy in real terms than it was prior to the pandemic, as the table below shows.

Suburb Median apartment price 2019* Average new interest rate June 2019** Monthly loan repayments based on 80% P&I loan over 30 years*** Median apartment price today Average new interest rate Oct 2021*** Monthly loan repayments based on 80% P&I loan over 30 years Difference
Alexandria (including Green Square) $704,000 3.66% $2,579 $810,000 2.30% $2,494 -$85
Zetland $877,500 3.66% $3,215 $890,000 2.30% $2,740 -$475
Waterloo $840,000 3.66% $3,078 $880,000 2.30% $2,709 -$369
* Data courtesy of realestate.com.au
** Data courtesy of ACCC
*** Data courtesy of Moneysmart

Expect a positive 2022

As we move into 2022, we’re likely to see many of the drivers of property prices in our area spring back into life. Overseas students should return, as should other skilled migrants, many of whom choose to live in our area. We should hopefully also see our hospitality sector return to full swing, as restrictions are lifted.

This should bring a new level of demand into inner-city Sydney, as renters look to lease somewhere and owner/occupiers and investors see the value in the market and decide to enter it.

As a result, we expect that 2022 will be a strong year for our local market and that we may see apartments even overtake houses as the most sought after properties.

Want more?

That’s it from us for 2021. We hope you have a relaxing break and a wonderful time over Christmas and New Year. Thanks for being part of our journey over the past 12 months and we look forward to seeing you again in 2022.

If you’re interested in buying or selling in Green Square or Waterloo contact our team today.

Article by Brendon Clark
‘The details matter - through every part of the process.’ With decades of runs on the board alongside a fresh outlook, Brendon is co-director of Clark - and one half of one of Sydney’s most dynamic and successful real estate duos. Having carved out a reputation for results in the… Read More
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