In these (cliché alert) unpredictable and unprecedented times (we did warn you) many of you might expect us to report that real estate is flat lining right now. We are happy to report that it is anything but. In fact, we are presently riding a little wave, although it is proving a bit of a bumpy ride. Some are winning big and some are winning small; but everyone is winning.
So what’s fuelling this wave of real estate activity on the north coast? There are a bunch of factors at play.
Probably the biggest contributor to the equation is the shift in work practices necessitated by COVID-19. Oodles of people found themselves working from home as the pandemic struck, and from this exercise they learned two simple things: ONE – working from home was entirely possible to do once you had the right technology in place, and in fact – they quite liked it (no long commute to and from work etc); and TWO – they realised that they could probably do this from anywhere, so let’s relocate to somewhere nice and we’ll all live happily ever after.
A third element contributing to a favourable property market is the realisation amongst some that if the pandemic is going to keep swirling around causing multiple switches in and out of shut-down, then they might as well be living it in space and comfort, amongst beautiful surroundings.
Some in real estate are calling these factors the coastal shift. Whatever you want to call it, it’s driving a tectonic shift in buyer habits. There are buyers who are fleeing COVID affected areas; some are departing from city living; and other buyers are locals who are changing the way they work. There is general dissatisfaction about the decision making of people in authority, and buyers are taking charge of their destiny.
Our region is seen as a safe bet. At the time of publication, we’re fortunate that our COVID numbers are low; we have NBN broadband installed throughout a lot of the region; we’re close to busy airports for when travel restrictions lift; we have good infrastructure; the region is blessed with natural beauty, and our community is welcoming. Who wouldn’t want to live here?
Throw in the historically low interest rates which help to minimise risk and you have a mini real estate boom. We are yet to see if this will become a new trend or a short-lived blimp. Significant economic fallout is yet to be really felt here; perhaps the pain is still coming? Or are we on the cusp of a market mega-boom, with the smart people securing things now before prices get away from them? Only time will tell.
All types of property are currently in demand. The most sought-after properties remain the ones with nothing left to do, but buyers are prepared to renovate or to build – and everything is up for grabs at the right price. Some places are selling within a week. At the high end of the market, the buying pool has real depth, and we are seeing scenarios where a number of serious buyers are tousling for individual properties.
Buyers are contacting us to let us know they are looking and they want to be at the front of the line as new properties come onto the market. And many of these buyers have healthy budgets. Buyers are well represented across the board, and include baby boomers, families, individuals and newly marrieds. Some people are buying for immediate occupancy, and others are buying now with plans to move here in five years. Bigger blocks are sought after because they provide better opportunities for space and coping if and when lock down returns.
The current scenario certainly feels like an early Spring market. But it’s more than this. High property demand is colliding with a short supply and this is having a curious effect on prices. Prices are jumping and this makes it difficult to accurately predict. Certainly, competition is seeing some great results, and the market is moving quickly.
There’s another factor also weaving its way back into the current real estate tapestry, and that’s FOMO. Rather than sit on the fence, people are jumping into the action to ensure they don’t miss out. And this starts to drive momentum as others also heed the call and jump in – with the mantra ‘we should be moving because the market is booming’ ringing loudly. And so the ripple effect potentially becomes a wave.
Border closures mean that immigration has stopped, and this has a flow through effect to the market. There’s credible speculation that Sydney will experience a downturn, especially as people move out with no-one moving in to replace them. Perhaps Sydney’s pain will be our gain? Emotion and FOMO are twin driving forces and they’re delivering a rising yet unpredictable market.
The final piece of the puzzle that seems to be driving prices is the Hollywood factor, with some big names living here permanently and many visiting for long periods. There are also a number of productions currently being filmed here, and these aspects really cement our region as a destination of choice for people keen to relocate.
Probably the only brake on real estate right now is the tightening of lending criteria from the banks. It can take up to four weeks for a home loan to be approved, with banks also considering job security in the context of the current environment as they assess loan applications. With some traditionally strong industries struggling during the pandemic, and banks being harder on business owners and the self-employed, this is removing a few people from the buyers pool. To be strongly positioned when the right property presents, buyers need to have their banking pre-approvals in order.