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But despite rising interest rates, falling auction clearance rates, growing economic uncertainty and increased cost-of-living pressures, property prices in our local area have been holding up remarkably well.
We explore the state of the real estate market on Sydney’s eastern beaches and analyse why it’s outperforming most other parts of Sydney.
A changing (and challenging) property market?
Sydney’s property market looked very different in 2022 than it did in 2021. Last year was all about record growth — over the 12 months to December 2021, the median Sydney property price lifted 29.6 per cent or by an average of around $1,000 a day, according to CoreLogic. This year, however, we’ve seen a market in transition, with the Sydney median price falling every month since January to now sit -5.4 per cent below its January peak.
We’ve also seen falling auction clearance rates, with the citywide average now around 50 per cent, according to Domain, compared with over 80 per cent — and even close to 90 per cent — in mid-2021.
Much of this change can be attributed to rising interest rates, which are affecting the cost of borrowing, as well as buyers’ borrowing capacity. Already this year, the Reserve Bank of Australia (RBA) has lifted rates four times in a row, and, chances are, they will raise them again.
But that’s only part of the story. Property prices across Sydney had started to decline even before the RBA started lifting rates, so there are other factors at play too.
How the eastern suburbs beaches have been faring
We’ve noticed that one of the main drivers behind rising prices was the desire for a better lifestyle. With the pandemic causing more people to work and spend time at home, a lot of people wanted to be closer to the beach or park. They also increasingly wanted the room to move.
And that’s been one of the reasons our area has been in — and remains in — such high demand, even beyond other parts of the city and nation.
At the same time, low stock levels meant people who wanted to be near the beach were facing increased competition to buy a home. So, while many other areas saw prices rise largely due to record-low interest rates, that was only one of the factors causing prices in our area to lift.
As a result, we’ve seen prices on the eastern beaches hold up well, despite broader declines. That’s especially true in the housing market, as opposed to apartments.
A breakdown of key suburbs over the past 12 months
This is reflected in the latest price growth figures for eastern beaches based on the past 12 months of sales.
The outlook ahead in 2022
In a white-hot market like last year’s, all properties tend to rise in value — even though some rise more sharply than others. In a changing market such as this one, there is often greater diversity between how suburbs and properties rise and fall.
This is when factors such as aspect, block size, proximity to transport and school catchment areas matter most.
While our area will continue to outperform many others, property types will become more important. Family homes in good locations, as well as prestige properties, are likely to continue to do better than many other property types. So will properties that can offer something special, such as a separate dwelling for work or living.
This can be seen in the recent sale of 8 Bond Street Maroubra. This Hamptons-inspired sea haven boasts sweeping ocean views, as well as a flexible separate residence. We had multiple interested parties and eventually sold it for $6.03 million — a great result and more than twice the suburb median.
In short, while conditions may not be what they were, the right property marketed the right way will still sell well, especially if the vendor has realistic expectations.
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