The pandemic has repeatedly delivered the unexpected for property markets. Buyer's Agent Nick Viner discusses why Sydney is pandemic proof.
There were some early predictions during the initial lockdown by respected economists that double-digit percentage price falls were looming. Their fear was that a mass economic slowdown would result in the real estate sector coming to a grinding, graceless halt.
But as we’ve progressed through the year, it’s become clear these concerns were an overreaction. Yes, the news has been bad, but to blanket all property under the one dour prediction was an error.
I’ve said it before – the coronavirus has amplified the fact that real estate markets are far more complex than many non-property economists realise.
As a professional who buys homes for clients in the upper-price bracket across Sydney’s best suburbs, I can tell you that locating and securing quality property isn’t easy, even during this crisis. I can only imagine how much more difficult it would be without the benefit of my strong agent network and the chance for off-market deals.
According to CoreLogic data released 6th September 2020, Sydney home values rose 9.6 per cent compared to 12-months ago.
So, throughout one of the world’s most devastating health crises, property in Sydney has maintained nearly 10 per cent growth. That’s quite a result.
Here’s why I believe prices have held up so well.
The top end of any market is already rarefied air, but the pandemic thinned out the options for buyers even further.
At the start of the pandemic, the first reaction by owners considering a sale was to stop and reassess – and many decided it best not to list.
For example, SQM Research showed listings for the entire inner west of Sydney fell 20 per cent between April 2019 and April 2020.
Tighter listings support property values because buyers keen to enter the market have less choice. Any who thought they were going to jag a COVID bargain were no doubt disappointed.
Top-end financial stability
Another element that is a high-end market strength is that participants tend to be financially resilient.
For starters, most aren’t among the hardest hit by the economic shutdown. It’s been lower paid employment in areas such as hospitality and tourism that’ve borne the brunt.
High-wealth individuals have the means to make plans that will include financial buffers, insurances and long-term risk mitigation. There have been few ‘forced property sales’ among the cohort.
In addition, for buyers in this space there’s less reliance on loan approvals when purchasing – especially for those who already having huge equity in Sydney property. I regularly deal with buyers in this space and finance is rarely a problem.
Each blue-chip property is fairly unique. From outlook and access to size, utility, condition and style, it’s rare to find two properties that are identical.
It’s the same with prestige buyers. What they want from a home varies depending on their lifestyle, family make up and professional requirements.
So, when a buyer looks to purchase, they are perhaps a little less concerned with price and more focussed on making sure their new acquisition will tick all their must-have boxes.
When they see a home that suits – particularly among an increasingly limited number of available listings – they’ll work hard to secure it.
Our national response to the pandemic is being seen globally as a success.
We’re looking like a pretty good option on the international stage and this will translate into increased interest from cashed up overseas buyers, particularly once borders re-open.
But one big driver has been expats looking to come back to Australia.
Back in March I appeared in the media with a prediction that this would occur, and it’s come to pass.
Expats returning home are often cashed up and keen to settle down, and this pandemic is bringing them home in droves.
Good fundamentals count
Another lesson from this pandemic is that space is valuable.
Whether you need a home office set well away from the kids or are looking for a decent yard with plenty of sunshine, this type of property in a desirable suburb will be pricey. The value of those features has been amplified by the claustrophobia of lockdown.
Also – prime Sydney locations offer among the greatest lifestyle destinations in Australia. Close to water, café hubs and restaurants, schools, entertainment – there is simply no other city in the world like ours.
These sorts of fundamental remain key to long-term capital gains and buyers know this.
Future Sydney growth looks good
Finally, Sydney remains the financial and cultural capital of Australia, so prospects for long-term demand and economic growth remain excellent.
We will bounce back – and it will be strong. As such, while prices are resilient now, most purchasers can see great future upside potential for the harbour city.
Engage in a buyers agent in Sydney?
A buyers agent is a licensed professional specialising in searching, negotiating, evaluating the property of purchase on behalf of the buyer.
There are many benefits to why to engage in a buyers agent however here are some of the key reasons:
Firstly, you’ll save an enormous amount of time when engaging in a buyers agent, where they can shortly list and inspect a property much faster than you would normally do as all they do for a living is to search for the right property! Searching the web, having phone discussions with real estate agents and viewing the properties over the weekends are the consuming parts of finding the right property for the right price.
Secondly, engaging in a buyers agent means that you could potentially save money as they specialise in negotiating at the best possible price. In a marketplace where vendors are professionally represented, we believe that buyers should be too. Buyers Domain. Which is located in the Inner West Sydney have saved many clients considerable amounts of money, finding their ideal properties at the best possible price.
Lastly, buyers agents eliminate the stress from buyers. Offering guidance in a professional manner and ensuring the buyer buys the property with confidence is a major benefit in engaging in a buyers agent as finding the right property is a time consuming process, which can also be very stressful and an emotional process. For a buyer, this could potentially result in poor decisions and paying too much for the property.
What does the services entail?
1. Discussing property needs on the buyers end, which includes understanding what are the objectives of the buyer, the preferences and the exact requirements. As all buyers have different goals and objectives in the property space, it’s important to realise what your goals are before engaging in a buyers agent.
2. The next step is to search and recommend properties that meet your requirements, buyers agents can provide you with a list of properties that may see fit and explain in detail, what are the potential opportunities that arise from these listings.
3. From there, the buyer agent will search the property and inspect the shortlisted properties with or without the buyer and provide a detailed report that highlights the findings of the property. If you do not attend the initial inspections, buyers agents will organise a time to inspect the property together as they understand the importance of a visual inspection and physically highlight the key points in the report.
4. Once the decision has been made, the buyers agent will provide sales information and the property appraisal report, which includes information such as the property itself but also the surrounding areas. The buyers agent will also engage in third party providers i.e. building and pest inspectors, mortgage brokers, solicitors, strata managers to co-ordinate the pre-purchase due diligence.
5. The buyer agent will attend the property with the pest and building inspector to give you feedback on the findings.
6. Negotiation then takes place to save the most amount of money for the buyer by getting the property for the best price or alternatively, the buyers agent will negotiate at an auction if required.
7. The last step is then to assist with all matters leading to the settlement.
What about commercial property?
There are a number of sectors in the commercial space, which includes retail, industrial, office, medical but also vary in types of properties i.e. shops, factories, car parks, centres, warehouses.
Buyers agents can help find the right commercial property as they have a wider range of properties that also include off-market properties. Buyers agents will do the due diligence to understand the buyers exact requirements and criteria so that they can identify the suitable locations available to them. Buyers agents have the experience and knowledge to help make the most informed property purchase. What’s more important is that buyers agent will successfully secure the right commercial property at the best possible price.
To summarise, there are many advantages for engaging in a buyers agent, whether looking for a commercial or residential property. Also, it’s important to note that the two biggest advantages are that engaging in a buyers agent will save the buyers time and money.