- The NSW property market has seen a varied impact of the changing economy under the pandemic.
- Working from home has allowed people to shift from main cities to regional areas of NSW.
- Lack of adequate supply has led to a surge in prices; however, the same is not true for all of NSW.
- The NSW government bought a property in Sydney for a price amounting to thrice its value.
- While property seekers are unable to find suitable land to inhabit, the government is sealing inflated deals in “out of session” meetings.
- Prices have not been the same across NSW, as the far-west region saw the property being sold for as low as $150
- The low prices should boost the demand for property and should encourage business ventures in the area
The New South Wales property market has experienced varying effects of the pandemic. The provision of working remotely, under the lockdown restrictions has enabled many to relocate to their hometowns away from the city. Consequently, the property prices have surged in many county states, including regional New South Wales.
Under the current circumstances, many people are reassessing their lifestyle choices. The sudden shift in the working population away from the city has led to many properties being left vacant. Alternatively, many regional cities have seen an increased demand for property ever since lockdown was imposed in Australia.
The unmet demand for property in NSW has led to a price surge. As people struggle to find a vacant property, those who can find vacant land have to pay exorbitantly high prices. Many locals have also had to shift out of NSW as they were no longer able to afford the rental prices.
Property owners claim they have never seen such a sudden surge in demand in decades.
The Covert $53 Million Sydney Land Deal
The NSW government has discreetly bought land in Sydney for three times its value. The site was highly contaminated and was primarily booked for the Paramatta Railways services to be used as a tram depot.
Even without the cost of decontamination, the property is valued at $15.5 million.
An NSW developer, Billbergia purchased the property in 2015, before the Paramatta Railway Project was announced. The government failed to negotiate a price and has now paid 3 times its value.
However, the land deal has been conducted in a quiet and hurried manner which has led to a lot of speculation. The deal was finalised in an “out of session” meeting which led to a greater inspection of the property.
Even though negotiation had started in 2015, the government of NSW was not able to acquire the land and has been trying to purchase it ever since then. The site was highly contaminated by what mostly seems to have been chromium six, which is a carcinogen. The restoration and thorough cleaning up might take longer than expected. Nobody is clear when the site would be fully decontaminated.
While property seekers are unable to find suitable land to inhabit, the government is sealing inflated deals in “out of session” meetings. The treasury of NSW has pledged a hefty budget for the forthcoming months. Considering this, the non-economic deal signed by the government fails to make sense to many.
Stark Contrast in Prices Across NSW
Across the far-west side of the NSW, properties have been selling for as low as $150. The prices have shown a drastic contrast when compared to the prices in Sydney. The highest purchase in the area amounted to about 3% of the median house price in Sydney.
Blocks of land were even sold for a dollar each. However, these were sold to the local station owners.
These low rates are expected to boost the demand for property around these areas, even if there are not enough people looking for property there. The uneven demand for property across NSW has led to these stark contrasts in their prices. With the provision of work from home, people can now buy a property anywhere and work from there. It is still unclear whether low property rates would ease the burden on certain densely populated cities like Sydney.
Regional area development is at the centre of planning for FY20-21 NSW budget. The budget would help in reviving regional areas of NSW, attracting investment, and making sure that it’s an amazing place to stay. Of the total government would spend about $8.7 billion on regional transport and roads; ~$900 million would be spent on building and upgrading of regional hospitals & healthcare facilities and about $650 million on regional schools. $2.7 billion is looked to be invested in reviving regional area businesses and attract further investment.
The NSW government is also set to launch a $250 million package to offer jobs and stimulate businesses. If implemented correctly in the areas with lesser property demand, this program might help with migration. With the promise of better business opportunities in areas with a higher supply of property, the people in search of jobs would be compelled to shift there.
Unemployment has increased for all of Australia, and NSW has also seen a steady rise in unemployment since March. However, property rates have varied across states. Many cities have seen a decline in prices as well. The states experiencing a shortage of supply have been hit more severely.