Sydney will get a ‘sugar hit’ from reopening NSW

Pete Wargent, the co-founder of BuyersBuyers, said the start of quarantine-free international travel for Australians, scheduled for November 1, will provide a timely boost to the city’s economy.

He said that while travel will initially only be open to Australian citizens and residents and their families, rather than tourists or international students, the increase in air traffic to Sydney ahead of Christmas will have a ripple effect. positive for the country’s economy.

“This decision is a crucial step in the process of reopening Australia to the world and getting workers and businesses back to full capacity,” he said.

“This will have a ripple effect in the form of much needed confidence boosts and a much needed ‘back to normal’ for individuals and businesses.”

He acknowledged that the easing of restrictions will also mean that Australians wishing to leave will also be allowed to fly, but that the positives will always outweigh the negatives. “Overall, this decision is likely to be a blow to the local economy, and there will be positive implications for the housing market in Sydney,” he said.

Mr Wargent said the impact of NSW’s reopening on the property market will be more apparent in 2022.

“After a prolonged period of high rental vacancy in the CBD and immediate surroundings, things will start to tighten in 2022 as new arrivals arrive, and the rental market should strengthen from here, particularly for short-term rentals,” he said. .

Echoing Mr Wargent’s positive outlook, RiskWise Property Research CEO Doron Peleg named Sydney as the first city to reap the positive impact of international arrivals.

He added that NSW’s decision would also give impetus to other states to follow suit.

“[The move] will ultimately force other states, like Victoria, to push their reopening roadmaps forward,” he said.

Sydney unit market to become biggest winner

Mr Peleg sees Sydney’s unit market emerging as the biggest winner from developments in the local property market, particularly APRA take steps to increase the service cushion in response to concerns about overall household indebtedness.

He noted that APRA’s latest intervention to tighten lending would make buyers more likely to favor family-friendly and other attached housing as affordable alternatives to single-family homes.

“The price differential between houses and units in Sydney has never been tighter before, and the deposit gap will drive more buyers into the units,” Mr Peleg pointed out.

“Based on our research, the greater the price differences, the higher the likelihood that family-friendly units will generate large price increases, as these units offer an excellent advantage, given their average price.”

According to RiskWise, mortgage service ratios are currently favorable to real estate investors due to falling interest rates. RiskWise expects unit prices in Sydney’s limited supply markets to appreciate significantly over the coming year as mortgage rates are expected to remain very cheap for some time.

On that note, Wargent issued a warning to investors returning to the market, especially those with high borrowing capacity. He stressed the importance of buying a property that will give investors value for money.

“Buyers need to ensure that they are buying a high quality property without significant issues, either with the location of the property or with the specific attributes of the property,” he said. .

He noted that buyers need to maintain a rational mindset when buying properties. “While there is currently exceptional demand for almost all properties, at some future time, under ‘normal’ market conditions, the demand for Class B properties will not be as strong as the demand for units of top quality housing,” he said. noted.

“Buyers need to keep a cool head and avoid decisions they may regret later.”

Sydney will get a ‘sugar hit’ from reopening NSW

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Last update: October 20, 2021

Posted: October 20, 2021