Sydney home prices expected to grow again in 2021 but inner city unit market will struggle
Uneven market conditions are expected to dominate Sydney property sales next year, with one section of the market recording significant growth in prices while another continues to struggle.
Uneven market conditions are expected to dominate Sydney property sales next year until international travel resumes and adoption of the COVID vaccine becomes widespread, real estate group Raine and Horne has revealed.
Raine and Horne chairman Angus Raine said the patchy market conditions would be characterised by weaker demand for apartments within inner suburbs and strong demand for other housing categories.
“Our view is that housing markets will be strong in 2021 while international borders will hamper inner ring apartment markets until we see planes start landing once again,” Mr Raine said.
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“Once immigration starts up again, and we can get a COVID jab, apartment markets in the capital cities will take flight again, especially given Australia’s fantastic response to the pandemic.”
The Raine and Horne group is forecasting 5-8 per cent average growth in real estate prices for Sydney over 2021 and more for regional NSW, which was a standout market this year.
Sydney prices grew by an average of 4 per cent in 2020 and growth over 2021 could be stronger because of renewed confidence in the market, cheap credit and a shortage of listings.
Strong growth in regional NSW real estate was partly the result of more work from home arrangements encouraging Sydneysiders to look for properties further out.
“It’s been a watershed year for regional NSW with average growth of 7 per cent as more Sydneysiders fled the city lockdowns to the Central and south coast, and many regional towns and cities,” Mr Raine said.
“The action hasn’t just been confined to the big regional cities such as Wagga, Bathurst and Orange.
“Even Boorowa, which is a tiny town located 340km southwest of Sydney, is benefiting. There are homes hitting the market in Boorowa with an asking price of $350,000 and selling for $420,000.
“While more listings might slow this level of growth slightly, I’m expecting markets in regional NSW to continue to roll through 2021 and well into 2022 as more city workers realise they can work remotely, still earn Sydney dollars but live regionally.”
Real Estate Buyers Agents Association president Cate Bakos said while January was traditionally a time when the real estate market sleeps, this summer was likely to spell a season of work.
“For many people their overseas plans are on hold, state border closures are questionable, and agents haven’t been making an income to fund a holiday,” Ms Bakos said.
“With pent up demand and many anxious buyers missing out as booming auction conditions run hot in major capital city and regional markets, vendors will be keen to capitalise on the improved consumer sentiment and are likely to push sales into January.”
Ms Bakos warned buyers to be cautious about feeling pressured to buy at any price.
“There is no doubt FOMO is affecting many people who feel they might be priced out of the market in 2021,” she said. “In a moving market like this, buyers need to make sure they are buying the right property and not making a costly mistake they will later regret.”
Originally published as Sydney home prices expected to grow again in 2021 but inner city unit market will struggle