COVID-19 has changed our lives in ways we could never have imagined.
Beyond the obvious health issues, we’ve experienced social, emotional and economic impacts.
Despite this, the property market in our area is actually doing well.
We take a look at the Lake Macquarie and Newcastle property market and highlight some of the key trends we’ve observed over the past couple of months.
Properties are in high demand
The local property market started in 2020 strongly. Then, in late March COVID-19 hit NSW and we experienced a downturn. The entire real estate industry experienced slower conditions across April and May. Buyers and sellers held off and prices took a small dip.
Fortunately, however, these conditions didn’t last. Now, as we enter the traditional Spring selling season, we’re seeing strong buyer interest in Lake Macquarie and Newcastle.
Since June, sales activity has been high. A property we listed in Lambton had over 60 groups attend its first open house at the end of August. And, according to realestate.com.au, the median sales price for houses in Lambton rose to $705,000 in September 2020. It was sitting at $647,500 in January before the pandemic hit.
The biggest issue we’re seeing is that there isn’t enough stock to satisfy the number of buyers. Sellers are holding off listing their homes for sale, waiting to see what happens to the economy. For example, there is around 40-50% less stock on the market, compared to a year ago, according to realestateinvestar.com.au
This is part of a wider national trend, according to Corelogic data. The number of properties available for sale across Australia fell 4.3% in July and there are 15.2% fewer properties for sale than this time last year.
When you combine lower stock levels with a decent number of buyers actively looking to make a move, it creates more competition. As a result, prices in Lake Macquarie and Newcastle have remained stable despite the current economic conditions.
Now is actually a good time to sell. Unless the situation alters dramatically, we expect to see strong sales and a solid second half of 2020.
Big demand for rentals
It’s not only our sales department that is currently experiencing higher than expected activity.
There has been similarly strong interest in rentals, resulting in close to a zero percent vacancy rate across our residential leasing portfolio.
While there have been headlines about rents falling in capital cities, this hasn’t happened in our area. For example, according to realestateinvestar.com.au, compared to 12 months ago rents in Warners Bay are up 2% for houses and 19% for units.
Strong buyer interest in lifestyle properties
One of the reasons for our continued strong growth is that the local market has different drivers from our capital cities. While Sydney and Melbourne draw their newcomers – and, to some extent, price growth – from overseas migration, Lake Macquarie and Newcastle see migration from other towns and cities within Australia, particularly from NSW. Border closures have had little impact on demand for housing in our area and people are still choosing to live here.
A lot of people moving here from Sydney and other metropolitan centres want a change of pace and the freedom to live a different life from the one they had in the city. This means lifestyle properties are hugely popular, particularly waterfronts.
There’s also been strong buyer interest in vacant acreage and land. This is perhaps due in part to people reassessing long-held plans and dreams during COVID-19, and deciding to act upon them.
Our homes themselves are receiving more attention
With overseas holidays – and many interstate holidays – off the cards right now and people spending more time at home, we’ve observed many homeowners are redirecting their energy into home improvement. From fixing all that DIY gone wrong to undertaking big renovations, we’ve been asked for advice on all sorts of home improvement plans.
This has been given a boost by the Commonwealth Government’s HomeBuilder COVID-19 stimulus which offers $25,000 towards a major renovation or new home build.
We’ve also witnessed an increase in the number of first home buyers in the market this year, no doubt assisted by generous government grants and schemes. Record low-interest rates have also encouraged many buyers who’ve built up equity in their property to look at upgrading to a larger family home.
We’ve had to change the way we do business
COVID-19 means we’ve had to adapt and change the way we do business. During the lockdown, home inspections were by appointment only and we switched to video calls rather than face-to-face meetings.
While overall it’s been back to business as usual, we’ve noticed that downsizers and older clients are being a little more reserved, cautious and selective – that’s understandable given the health implications of COVID-19.
We’re doing our best to help them achieve their property goals. For example, by offering private inspections instead of open home viewings. We’re also lucky to have a large team, which means we are able to provide a more personal service when required.
Finally, the pandemic has caused a growing interest from our clients in selling their property online – and you can read more about this technology here.
Lake Macquarie: by the numbers
Corelogic auction clearance rate (2 September): 66.7%
Houses median sales price: $656,000
Units median sales price: $550,000
Houses weekly rent: $460
Units weekly rent: $465
Vacancy rate: 0.83%
Houses median sales price: $723,500
Units median sales price: $618,000
Houses weekly rent: $523
Units weekly rent: $430
Vacancy rate: 0.36%
Houses median sales price: $505,000
Units median sales price: $440,000
Houses weekly rent: $380
Units weekly rent: $330
Vacancy rate: 0.43%
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.