- Sydney’s luxury housing market has been resilient against COVID-19 pandemic.
- The highest median house value was clocked in Darling Point at A$7.06 million, according to the latest CoreLogic survey.
- Record low mortgage rates have provided enough cushion to the property values.
Australian property market is seeing a strong revival after remaining under stress in 2020 due to the coronavirus pandemic. With national home values rising 0.4 per cent in October and 0.8 per cent in November, Australia’s luxury housing market has emerged more buoyant against COVID-19 pandemic than expected. Real estate investors have become more confident considering how the property market performed strongly in suburbs this year.
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Sydney leads the pack
According to the latest CoreLogic survey ‘Best of the Best report for 2020’, suburbs in Sydney dominate Australia’s high-end housing market. The highest median house value was yet again clocked in Darling Point at A$7.06 million. It implies that half of the houses in Darling Point are priced more than A$7.06 million.
Other in the top 10 are Bellevue Hill (A$5.72 million), Vaucluse (A$5.39 million), Double Bay (A$4.76 million) and Woolwich (A$4.2million), Mosman (A$4.1 million), Tamarama (A$4.0 million), Toorak, Rose Bay (A$3.9 million) and Dover Heights (A$3.7million). Similarly, the highest median unit value was reported from Point Piper, as in 2019. Nine of 10 suburbs in the list are from Sydney. The only suburb outside Sydney is Melbourne’s Toorak.
Eliza Owen, Head of Research CoreLogic Australia, said lower mortgage rates and improvement in consumer sentiment helped the high-end Sydney market, generally considered volatile, to recover fast. Owen also said that a few suburbs listed here are the ones with the highest turnover in the year to September despite being worst affected by COVID-19.
What’s in store for 2021?
Record low mortgage rates have provided enough cushion to the property values. Owen expects the mortgage rate to exert upward pressure on prices through 2021. The gradual end to mortgage repayment deferrals amid economic recovery bodes well for the Australia’s real estate sector going ahead.
Even the lower cash settings can be said to have significantly contributed towards developing resilience in the housing markets amid the pandemic. The property prices can rise by 8 per cent with every percentage point reduction in the cash rate, according to the Reserve Bank of Australia (RBA) estimates.
Both RBA Governor Philip Lowe’s indication of holding cash rate at record low for some years to come and the cash rate being slashed 65 basis points over 2020 can act as significant tailwind for Australia’s property values going ahead.