While COVID-19 clipped the wings of Sydney’s property market recovery, interrupting a solid rebound since the federal election in May 2019 and creating uncertainty throughout 2020, experts are hopeful that the NSW capital will recover sooner than later.
During the early phase of the pandemic, Sydney home values were protected by the two interest rate cuts, massive government stimulus and loan deferral options, which kept genuine buyers engaged in the market while listings fell, according to the latest report from McGrath Estate Agents.
In fact, first home buying remained strong, accounting for 29 per cent of new owner-occupier loans in NSW in July 2020. More than 3,100 of the first 10,000 loan guarantees under the First Home Loan Deposit Scheme went to NSW buyers.
This created a positive supply/demand balance that resulted in healthy auction clearance rates of 60-65 per cent from mid-May through to October.
As of October 2020, Sydney median house price sits at $983,262, while median unit price sits at $743,288.
According to McGrath, new infrastructure will play a central role in the NSW economic recovery, with 87 projects worth more than $25 billion and creating at least 50,000 jobs fast-tracked and approved by early September 2020.
They include the new Sydney Gateway road connecting WestConnex with Sydney Airport and the 850-hectare Mamre Precinct, which will become a major industrial and recreational hub. It will have 50 ha of parklands, cycling tracks and walkways for locals and will be operational by mid-2021.
Planning is also being expedited on the $31 billion Parramatta Road Corridor revitalisation, which will deliver 27,000 new homes and 50,000 jobs along Sydney’s ‘economic spine’; the 2036 Plan, which includes the new Metro Station at Crows Nest; a new mixed-use precinct and sporting hub at Glenfield; and the overhaul of the Marsden Park North and West Schofields precincts, including 18 new playing fields and road upgrades.
Further, construction has begun on the final stage of Parramatta Square. The $2.7 billion makeover of Sydney’s second CBD includes Australia’s biggest office tower by gross floor area.
Apart from new infrastructure, government aid and stimulus will also drive the recovery of the Sydney property market, McGrath highlighted.
For one, stamp duty has been scrapped for first home buyers of new homes up to $800,000, saving them up to $31,3359. There is also a sliding scale of concessions up to $1 million. This stimulus initiative will be in place until 31 July 2021.
The $25,000 HomeBuilder grant has also been popular, with 7,500 registrations in NSW within the first month of the program. In FY20, Sydney’s house price median rose 14.5 per cent to $1,010,426 and the apartment median went up 10.6 per cent to $761,792.
“Exceptional pandemic management in NSW has shielded the Sydney property market, while the rise of remote work has boosted demand in regional NSW.
“If outbreaks are consistently contained, Sydney will be poised for take-off again as soon as a vaccine is confirmed,” the report concluded.