Last week we heard the announcement that Sydney’s five-week lockdown would be running another four weeks, taking us through from mid-June to at least the end of August.
While it has been crippling and difficult for many of our local businesses, the property market has so far fared relatively well, with pre-lockdown conditions still holding.
What’s happening in Green Square and Waterloo?
We’re noticing two main trends in the local sales market both of which are driving up demand in the market for larger apartments.
1. Buyers are upsizing. Thanks to the lockdown, and the increasing trend for working remotely, we’re seeing more buyers looking for more space. Buyers in this group may already own a small property, but now they want a dedicated area, such as a study or extra bedroom, that allows them to work from home. We’re also seeing high demand for units or townhouses with larger than normal outdoor spaces, such as courtyards or large terraces.
2. Buyers are increasingly priced out of the market for houses. Across Sydney, house prices tend to have been rising more rapidly than apartment prices. In the six months to 30 June 2021, the median house price lifted an incredible 18.5%, while apartment prices rose 8.2%. This means many buyers who were hoping to upgrade to a house have now decided to turn their attention to centrally located, larger two or three-bedroom apartments. In many cases, these buyers are getting a lot more for their money than they would if they bought a house. Often this includes a third bedroom or study space in a better location.
How the Sydney lockdown has impacted the way we do business
Sydney’s current restrictions mean all our properties are only available for inspection by appointment. This means that rather than a 30-minute open for inspection, we show a property across two-to-three hours and book potential buyers or renters at COVID safe 10-15 minute intervals.
So we don’t inconvenience owners, tenants and landlords, we’re also pre-qualifying buyers before they come through, to make sure they’re serious and have their finances in place.
Prospective sellers should not be worried about coming to market in this lockdown environment. Despite these necessary restrictions, we’re still getting a high volume of quality buyers, keen to transact. There are still a lot of people in the market looking to make the next step of their property journey.
A case study
132/169 Phillip Street Waterloo is a spacious one-bedroom plus study apartment, in the Danks Street precinct. With a huge North facing balcony extending the full length of the apartment, and offering city views, it held great buyer appeal.
We entered lockdown half way through the auction campaign and buyers were only able to see the property by appointment. We also had to move the auction online.
Thinking of selling?
Before auction day, we received a strong offer, so we decided to give all interested buyers the opportunity to put in their own pre-auction offer. We received eight, ranging from $1.212 million all the way to the final sales price of $1.513 million – well above the owners’ expectations.
The local rental market
This year the rental market in Waterloo and Green Square has been steady. While we haven’t seen an increase in yields, properties are still leasing well. In fact, last week alone we took six deposits from new tenants.
Generally, a lot of properties in inner-city Sydney are leased to international students, so our current closed borders are dampening the market. This lack of students is compounded by the fact that we’re also not seeing more established renters arriving on working visas.
That said, people still need to move, and properties are usually leasing within one-to-two weeks of being advertised. Vacancy rates have come down to 2.41% after touching four per cent in May 2020.
The median rent in Waterloo is now $600/week for units and $700/week for houses and the average yield is 3.67%, although we expect this to improve when the border reopens.
The overall picture
According to realestate.com.au, by the end of June 2021, the median price for a house in Waterloo was $1,320,000 and the median unit price was $845,000.
The sentiment in the market has been positive throughout 2021 and we haven’t seen that shift, even as the city endures a prolonged lockdown. Sellers should feel reassured that buyers are feeling confident. Quality properties aren’t staying on the market for long. If buyers see something they like, they tend to move fast.
If you’re interested in buying or selling in Green Square or Waterloo contact our team today.