Despite the pandemic, the property market in Lake Macquarie and Newcastle has been performing strongly.
Unless the situation alters dramatically, we expect to see continuing strong sales and a good end to 2020.
With that in mind, here’s what’s behind 2020’s solid performance.
1. Low stock levels are keeping prices high
The biggest driver of the market right now is the low number of properties for sale. There simply isn’t enough stock to satisfy the number of buyers going around.
According to realestateinvestar.com.au, there is around 35-50% less stock on the market in Toronto, compared to a year ago. It’s the same in beachside Redhead, with stock levels down 46% on last year.
Low stock levels are partly the result of the uncertainty around COVID-19 and the economy. Many would-be sellers have been holding off on listing their homes for sale, as they wait to see what happens next.
Our area is certainly not alone in reporting low stock levels. According to Corelogic data, the number of properties available for sale across the country fell 4.3% in July and there were 15.2% fewer properties for sale than the same time last year.
A similar story is playing out in the rental market, where strong demand and low supply is leading to a vacancy rate of close to 0% across our residential leasing portfolio.
As we wrote earlier this year, when you combine lower stock levels with strong demand from buyers actively looking to make a move, it creates more competition. As a result, sales prices in Lake Macquarie and Newcastle have remained stable despite the current economic conditions.
2. Strong sea change and tree change interest in lifestyle properties
COVID has inspired more people to seek a tree or sea change and our area has been one of main beneficiaries.
After all, we’re situated within a couple of hours of Sydney and close to the services and amenities of Newcastle, but we offer a more relaxed pace of life and far better value for money.
Our beach or lakeside homes, vacant land and acreages are in strong demand from buyers from other regions and cities.
3. Economic conditions
We’re also seeing several broader economic factors are at play in our local property market.
For the past few years, record low-interest rates have been driving up prices and encouraging people to upgrade their homes or enter the market for the first time. Since the pandemic, interest rates have been cut even lower.
COVID-19 emergency measures are also playing a part in keeping prices high. This includes bank policies on mortgage freezes, as well as government policies in the form of rental relief and JobKeeper.
4. Strong prestige and waterfront sales
Interestingly, the economic downturn has so far had little to no effect on prestige sales. We’ve seen high levels of demand and healthy sale prices for high-end and waterfront properties.
The prestige market is also performing strongly across much of the country. Sydney saw 359 sales above $3 million in the three months to June – 42 per cent more than in the same period last year.
5. More first home buyers in the market
Another positive trend we’ve been witnessing across 2020 is that more first home buyers are entering the market.
They’re be encouraged by record low-interest rates as well as the many grants and schemes available to them, including:
- NSW Stamp Duty Concessions
- The First Home Buyer grant
- The First Home Loan Super Saver Scheme and the First Home Loan Deposit Scheme
- The HomeBuilder Scheme
Together, these factors are making saving a deposit and getting a foot on the property ladder a lot easier than it has been for some time.
6. Silent or off-market sales are an increasingly big part of our sales
The way we’re selling property has changed rapidly over the past year. We estimate that up to a quarter of the properties we sell are now transacted “off-market”.
Silent or off-market sales happen without any public advertising campaign, so you won’t see these properties advertised on realestate.com.au or domain.com.au. Instead, we contact our database of keen buyers and tell them about a property that meets their search criteria that the owners want to sell. That way, the sale is discreet and both the buyers and sellers get to maintain their privacy.
For the right kind of property, we’ve found that going off-market can lead to a result just as good – or even better – than more traditional sales methods.
For example, our Toronto office recently sold a property off-market in August 2020 for $1.1 million, when the vendor had originally hoped for just $900,000.
Want to know more about the state of the local market?
Find your ideal home in Lake Macquarie or Newcastle by contacting our team today.