Lockdown adds another $20,000 to Sydney home prices

As if Sydney property prices weren’t expensive enough, the city-wide lockdown means a housing shortage, driving the cost of a hone even further skyward.

Extended lockdown has created one of the worst housing shortages on record and fuelled a new explosion in already hefty Sydney home prices.

With roughly a third fewer homes available for sale compared to before lockdown, Harbour City home prices jumped another 1.8 per cent, or about $20,000, over August.

It came on the back of a 2 per cent rise in values over July, which means a typical house now costs just under $1.3 million, while units average $826,000, according to CoreLogic’s home value index released Wednesday.

Lockdown has proven a boon for real estate agents, with house prices soaring.

Housing experts revealed that despite generating a weaker economy and rising unemployment, the lockdown pulled up the market by smashing confidence among sellers.

Many homeowners who would otherwise have put their homes up for sale decided to hold off listing, but buyers, spurred by low interest rates, remained active.

CoreLogic research director Tim Lawless said it was difficult for first-time buyers to keep up with the ­extreme price rises in these conditions.

“Housing prices have risen almost 11 times faster than wages growth over the past year, creating a more significant barrier to entry for those who don’t yet own a home,” Mr Lawless said.

Total growth in Sydney house prices was 26 per cent over the past year — at this time last year, a typical house cost $1.07 million. It’s now more than $220,000 higher.

Apartment price rises were not as extreme at 9.4 per cent for the year, but Mr Lawless said growth was beginning to catch up as more buyers became priced out of the house market.

Real Estate Institute of NSW chief executive Tim McKibbin said it was a seller’s market and homeowners considering selling may be better off listing sooner rather than later.

“Intense demand, constrained ­supply, the willingness of buyers to act, increasing prices — all these factors were gathering momentum when the outbreak took hold, and they have been maintained,” he said.

Real Estate Buyers Agents Association president Cate Bakos said it was the opposite with buyers – those who could afford to wait should consider ­delaying their plans until after lockdown restrictions were scaled back.