quarantine-free-travel-Sydney
Fully vaccinated Australian citizens and residents are allowed to fly into NSW without quarantine from November 1, 2021. Image – Canva.
  • With the recent announcement of fully vaccinated Australian citizens and residents allowed to fly into New South Wales without quarantine, property experts believe the market will strengthen
  • “While the immediate impact on the housing market will be limited, the impact will be noticeable in 2022," said BuyersBuyers.com co-founder
  • Buyers will be pushed towards units

With the recent announcement of quarantine-free travel for fully vaccinated Australian citizens and residents coming into New South Wales, property experts believe the market will strengthen.

BuyersBuyers.com co-founder Pete Wargent said, “this move is likely to be a sugar hit for the local economy, and there will be some positive implications for the housing market in Sydney.

“While the immediate impact on the housing market will be limited, the impact will be noticeable in 2022. After a prolonged period of elevated rental vacancies in the CBD and its immediate surrounds, things will start to tighten up over 2022 as new arrivals fly in, and the rental market should strengthen from there, especially for short-stay lets.”

BuyersBuyers.com CEO Pete Wargent

Mr Wargent said with investors coming back into the market, those with a borrowing capacity of around $1 million will undoubtedly be looking at units in Sydney over the year ahead, with plenty of opportunities to buy a property that will deliver a strong capital growth.

RiskWise Property Research CEO Doron Peleg said, “as first cab off the rank Sydney will be the first market (in Australia) to see an impact from international arrivals.

“We expect the regulator APRA’s moves to tighten lending to more leveraged borrowers combined with growing affordability challenges to see more buyers in Sydney looking at family-suitable units and other attached dwellings, as affordable alternatives to freestanding houses.”

apartment-versus-house
Mr Peleg said, “the price differential between houses and units in Sydney has never previously been so stretched, and the deposit gap will push more buyers towards units.” Image – Canva.

RiskWise’s research found the greater the price differences, the higher the likelihood that family-suitable units will deliver strong price increases.

The research also expects unit prices in the supply-constrained markets of Sydney appreciating materially over the coming year, with mortgage rates expected to stay very cheap for some time.

Mr Peleg said, “in particular, boutique developments with no facilities such as lifts, pool or a gymnasium are likely to outperform due to strong demand by investors, downsizers, and well-off professionals who seek low-maintenance and comfortable dwellings. The high land value content in these locations and unit blocks tend to drive capital growth over time.

“The Sydney unit markets where we expect to see robust performance include those in the eastern suburbs, in the $1 million to $1.4 million price range, such as Vaucluse and Bellevue Hill. Our research has also highlighted some sub $800,00 suburbs in the inner west, such as Strathfield and Summer Hill.”

Some suburbs on the north shore and in the northern beaches, like Mosman and Cremorne, also look attractive from a unit to house price ratio.

Top 18 suburbs to buy a unit in Sydney

Suburb

Postcode Median Unit Price Median House Price

Unit to House Price Ratio

Centennial Park

2021 $851,190 $6,173,138

14%

Vaucluse

2030 $1,168,518 $7,168,101

16%

Darling Point

2027 $1,677,120 $9,051,670

18%

Bellevue Hill

2023 $1,367,845 $7,188,375

19%

Double Bay

2028 $1,468,691 $5,539,003

27%

Strathfield

2135 $692,835 $2,918,446

24%

Summer Hill

2130 $787,314 $2,070,893

38%

Croydon

2132 $761,830 $1,991,609

38%

Mosman

2088 $1,175,420 $5,091,737

23%

Greenwich

2065 $927,300 $3,295,565

28%

Cremorne

2090 $1,152,206 $3,862,186

30%

Roseville

2069 $923,805 $3,068,079

30%

Gordon

2072 $923,180 $3,055,622

30%

Manly Vale

2093 $917,830 $2,580,403

36%

Narrabeen

2101 $1,089,439 $3,040,190 36%

Freshwater

2096 $1,055,112 $2,887,016

37%

Collaroy 2097 $1,027,415 $2,699,295

38%

Queenscliff 2096 $1,195,931 $3,056,731

39%

BuyersBuyers, 2021

Mr Wargent of BuyersBuyers.com cautioned buyers to ensure they buy a high-quality property.

“While there’s currently an outstanding demand for almost all properties, at a later point of time, under ‘normal’ market conditions, the demand for B-grade properties will not be as strong as the demand for top-quality dwelling units.”

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