- REINSW CEO has welcomed the state government's roadmap to freedom
- Improvement to sentiment will make little difference to real estate given the already strong performance
- Investors appear to be showing greater interest in apartments, he says
As prices and clearance rates continue to be high in New South Wales despite the ongoing lockdown, Real Estate Institute of New South Wales (REINSW) CEO, Tim McKibbin, has welcomed the state government’s ‘roadmap to freedom’.
The roadmap, which has been cautiously welcomed by the Property Council (PCA), means as of today restrictions are eased for those fully vaccinated. This includes home gatherings of up to five visitors given adults are all vaccinated.
“We have our long-promised roadmap out of lockdown for when we the state reaches the 70% double-dose milestone and while the NSW Government will retain the right to shut down areas as needed to quell subsequent outbreaks, the overall impact is likely to be a boost in confidence,” said Mr McKibbin.
“In a broader economic sense, any improvement in consumer sentiment is welcome news.”
Tim McKibbin, REINSW CEO
However, Mr McKibbin noted that in a property sense, “there’s actually not a great deal of room for improvement” given real estate continues to outperform, noting clearance rates are already very high.
“This should continue in the weeks ahead as reduced volumes and intense demand combine to produce predictably strong results for vendors,” he said.
“Prices can be expected to remain steady and strong.
“It’s well-known the trajectory house prices have taken during the pandemic but recent figures from CoreLogic suggest the rate of apartment price growth is starting to close the gap.”
A factor in the strong housing market is that under most circumstances, private one-on-one residential inspections are allowed in Sydney.
In Melbourne, on the other hand, they are significantly restricted despite numerous calls for inspections similar to those being conducted presently in Sydney.
Mr McKibbin added that increasingly, investors are returning to the scene, thanks to the government recently clarifying the rules that allow for one-on-one inspection for investors, although there will be limits on geographic movements.
He noted that investors in particular are seeking out apartments.
“Many investors target apartments due to their relative affordability and, if the product is new, the depreciation benefits,” explained Mr McKibbin.
“In lieu of a proper commitment to increase supply, if there is indeed scope for further improvement in the real estate market, perhaps it’s the apartment sector that will reap the benefits of an increase in sentiment.”
SQM Research data shows that units prices have been on the rise in recent months after declining during 2020. In January 2020, the weekly average asking price for units was $721,772. A year later, this fell to $668,84 before rising back to $705,359 as of this month.
However, the pace of growth is nowhere near as significant as houses. In January 2020, the average asking price for houses was $1,327,709. In January 2021 this increased to $1,369,855 and now it is $1,620,131 – highlighting the significant growth witnessed in the housing market.