What’s really going on in Sydney’s Real Estate Scene…..
Our great city, Sydney, has long been in high demand for real estate. What’s not to love, we have the breathtaking harbour views, iconic landmarks such as the Opera House and Harbour Bridge, and abundant job opportunities, arguably more opportunities than anywhere else in Australia. It really is no wonder why people from all over the world desire to live in this special city. However, yes, this is the ‘but’ moment…We all know, in recent years, the Sydney real estate market has experienced some significant changes.
One of the major factors impacting the Sydney housing market is the Australian government’s crackdown on foreign investment. In 2015, the government introduced new measures to limit foreign buyers’ ability to purchase residential properties by tightening regulations and fees. This move was made in response to concerns that foreign investment was driving up housing prices and making it increasingly difficult for locals to get a foothold in the market.
As a result of these measures, the number of foreign buyers in the Sydney market has dropped significantly. Some reports suggest that foreign buyers have gone from accounting for around 16% of all property purchases in Sydney to less than 5%. This has led to a levelling off of prices in some areas that were previously experiencing rapid growth due to foreign investment.
Another factor impacting the Sydney market is still the lingering impact of the killer that is – the COVID-19 pandemic. Like many cities around the world, Sydney has seen a significant drop in tourism, which has had a knock-on effect on the local economy. Many businesses have been forced to shut their doors, and as a result, there has been a rise in unemployment. This has made it more difficult for people to enter the housing market as they struggle to save for a deposit or qualify for a mortgage. Yes, we have seen a slight increase in tourism of late, and the government seems to be prioritising initiatives to support the consistent rebuilding of our travel economy, but we still have a while to go yet.
Now, ridding the negativity, I thought we could also bring some positive observations that came from the pandemic… Afterall, we’re Bowerbird Interiors, we don’t like to harbour the negative! The positive changes to the Sydney housing market, with many people working remotely and no longer tied to a particular location, we’ve seen an increased demand for properties outside of the city centre. This has led to growth in areas such as the Blue Mountains, the Central Coast, and the Illawarra region, where buyers can purchase larger properties with more outdoor space and a quieter lifestyle. This trend has been around for a couple of years, and doesn’t seem to be going anywhere. Yes, ok, some companies are asking employers to return to the office, but the grass is greener lifestyle we have all been experiencing in the outer areas has meant that people are more willing to commute in their return to work regime (yes, and we’ll save the whinge about Sydney’s traffic epidemic for another day).
Speaking of the ‘return to the office’ debate, even employee’s who are returning to the office, for the most part, it seems to be a hybrid arrangement, and so there is still a criteria for home buyers looking for homes with a dedicated office space or a spare room that can be converted into a workspace. This has led to an increase in demand for larger homes, particularly those with a garden or outdoor space.
In terms of property types, apartments have seen a decline in demand, whereas houses have become more popular. This is likely due to the increased desire for space and privacy as a result of the pandemic. However, there are still some areas in the city, such as the CBD, where apartments remain in high demand due to their proximity to work, transportation, and amenities.
Overall, the Sydney real estate market is experiencing a period of change and adjustment. While the government’s crackdown on foreign investment and the COVID-19 pandemic still lingering has had a significant impact on the market, there are signs that it is slowly recovering. With increased demand for larger properties for those desiring to still work from home, it will be interesting to see how the market develops in the coming years.
At Bowerbird, we appreciate the current real estate climate is challenging for Real Estate Agents, and we want to be able to talk about challenging, inspiring, helpful topics that support you. We’re here.
Oh & Randomly, to finish off this article, a PSA – We have moved into our brand new studio. Feel like popping in for a cuppa? We would love to have you over for a nice banter, and show you through our new space.
See you soon.