Lower North Shore Yearly Market Wrap: 2021

CEO Khai Intela
A Year of Growth and What to Expect in 2022 2021 has been an exceptional year for the Sydney property market, particularly the Lower North Shore. With the median dwelling price rising almost 25% over...

A Year of Growth and What to Expect in 2022

2021 has been an exceptional year for the Sydney property market, particularly the Lower North Shore. With the median dwelling price rising almost 25% over the year, according to CoreLogic data, it's clear that this region has experienced significant gains. But what factors have contributed to this growth, and what can we expect in 2022?

Continued Strength and High Auction Clearance Rates

While growth across Sydney has been slowing, the Lower North Shore has remained strong throughout the year. One indicator of this strength is the consistently high auction clearance rates. In November, local newspapers reported a perfect 100% clearance rate in Mosman and a 96% rate in the North Shore. This sustained demand has translated into impressive growth for properties, especially houses, in many suburbs of the Lower North Shore.

Factors Influencing Growth on the Lower North Shore

The Lower North Shore's growth can be partially attributed to the overall growth of the Sydney and Australian property markets. Record low interest rates have made borrowing cheaper than ever before, encouraging people to upsize their mortgages. Additionally, the trend of working from home and reassessing priorities due to the pandemic has led to increased spending on home upgrades.

However, the Lower North Shore's unique market dynamics contribute significantly to its growth. The region boasts a significant number of prestige properties, which have outperformed other segments. Unlike lower-priced properties that may be driven by low interest rates, luxury homes are often bought without extensive mortgages.

Other localized trends have also played a role in the growth of the Lower North Shore. One notable trend is the increased interest from expat Australians who are looking for a home base in Australia. The Lower North Shore's strong local economy, which includes sectors such as professional services, finance, insurance, and healthcare, has also created confidence among buyers. Additionally, the emphasis on lifestyle, with great cafes, shopping, beaches, and bushland in close proximity to the city, has made the Lower North Shore highly desirable.

Downsizers have also entered the market, taking advantage of the substantial gains they have made on their family homes since the COVID-19 outbreak.

Likely Trends for 2022

As we move into 2022, many of the same trends are expected to continue. However, there are signs that the market is entering a period of more sustainable growth, where the balance between buyers and sellers is more even. Here are a few factors contributing to this shift:

  1. Higher stock levels: The market's high prices during the lockdown were driven by a lack of available properties. With restrictions lifting, more properties are hitting the market. This trend is likely to continue into the next year, benefiting both buyers and sellers.

  2. Apartment market comeback: While apartment prices have risen in 2021, they haven't kept pace with house price growth. This means there is still value to be found in the apartment market, making it an attractive option for buyers.

  3. Potential interest rate rises: While the Reserve Bank of Australia initially stated that interest rates would remain unchanged until 2024, forecasts now suggest a rise in interest rates next year. This could impact the first homebuyer and investor markets more than the luxury market.

Of course, these predictions are subject to change, especially given the uncertainty surrounding the ongoing pandemic. However, based on current conditions, we anticipate a reasonable year for Lower North Shore property in the next 12 months.

If you're interested in learning more about the current market or would like an appraisal of your home, please feel free to get in touch.

Caption: Balmoral Beach – a stunning destination on the Lower North Shore.