How COVID coaxed homebuyers into spending more
The pandemic has driven a year of record spending in the housing market, with Sydneysiders splashing out more money on houses and units in 2020 than they did in the year before the coronavirus hit.
Preliminary sales figures showed close to $95 billion changed hands in the NSW housing market in the year up to November - roughly the same amount spent on state real estate in the whole of 2019.
The increase coincided with a rise in spending across both regional NSW and Sydney, realestate.com.au data showed.
With plenty of December sale results still to be declared and agents reporting an unusually busy late-year run of auctions, property analysts said 2020 property spending was set to dwarf 2019 transactions.
CoreLogic data showed the total value of NSW sales over the year to September was already nearly 19 per cent higher than over the same period in 2019, while in Sydney it was 20 per cent higher.
There was also a bump in national sales, with close to $285 billion spent across the country - a 10.3 per cent increase on the same period in 2019.
CoreLogic head of research Tim Lawless noted the value of NSW transactions in the year to September represented the most real estate spending since 2017.
Mr Lawless attributed the big spending to a 13 per cent increase in NSW transactions for the year, while prices were about four per cent higher, on average.
"Considering the upturn in housing market conditions is gathering momentum, it's highly likely home values and sales activity will end the year even higher … (and) move to new record highs next year," Mr Lawless said.
Realestate.com.au chief economist Nerida Conisbee said increased time at home during the pandemic may have been a factor in the higher spending this year as it encouraged families to bring forward plans to upsize.
With international travel and many entertainment options off limits this year, families were also saving more money - much of which went into deposits for homes, Ms Conisbee said.
A variety of stimulus measures, such as stamp duty discounts and grants for new purchases, gave the market an additional boost by encouraging first homebuyers, she said.
"A lot of good news came out for buyers, particularly in November, and the market has been going very strong since then," Ms Conisbee said.
Affluent suburbs were among the strongest markets. The biggest single market for homebuyers was Mosman, where more than $1.5 billion in houses and units sold over the year to November, according to CoreLogic.
Manly was the most popular unit market with $504 million in total apartment sales, followed by Dee Why, Cronulla and Randwick.
The Ryde region and northern coastal areas such as the northern beaches and Central Coast accounted for most of the suburbs with the biggest rise in property prices for the year.
This included the suburb of East Ryde, which had the biggest annual house price increase of any Sydney suburb at 19.2 per cent.
Other suburbs where prices grew by more than 16 per cent, or more than double the city average, included North Ryde, West Ryde, North Narrabeen and Newport, along with Davistown on the Central Coast.
Adrian William agent Adrian Tsavalas said renovated houses with backyard space were often selling for record prices.
This was because families and upsizers were the dominant buying group and few larger houses were coming up for sale," he said.
"One-bedroom units are the opposite: they're a hard sell because there are many for sale and no investors to buy them," Mr Tsavalas said.
Rachelle Johnston recently listed her Darlington home and was pleasantly surprised with the result.
"We had conservative expectations," she said. "We were surprised by the buyer numbers at the (inspections) and ultimately we were very happy with the price. We got the same result we would have expected pre-COVID."
Ms Johnston said she encountered stiff competition in her search for her a new larger home.
"It felt like we were up against a lot of buyers, especially for the renovated properties."
David Anderson recently sold his Ryde house and got about $100,000 higher than what he considered a dream price.
"We saw neighbouring properties get good prices and we figured it would be better to sell now," Mr Anderson said. "We'll see how the market performs before we buy."
Originally published as How COVID coaxed homebuyers into spending more