Northern Beaches prestige sector remains uncertain in the time of COVID-19 pandemic: HTW residential
The first home buyer market is more sensitive to general economic factors such as interest rate movement and fiscal policy, according to the latest Herron Todd White (HTW) residential report.
The valuation firm took a look at what things traditionally matter to property markets and provided some take on how current crisis is playing into decision making.
The report suggests that Localised factors such as supply levels also play a part, with affordability being a key market driver.
Brookvale is a popular sublrb for first home buyers, having one of the lowest median unit prices of $745,000 as at December 2019, in comparison to the Northern Beaches median of $875,000 (source: CoreLogic).
"The area has seen strong development over the course of the past decade, resulting in a healthy level of stock that has consequently placed downward pressure on values," the valuation firm said.
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Northern Beaches building approvals dropped drastically in 2018/2019 and are tracking at similar levels for the 2019/2020 financial year.
"There is a clear correlation between volume levels and building approvals and we would anticipate these factors to impact the first home buyer unit market," the valuation firm said.
"For the upgrader market, we’ve seen strong demand from buyers outside of the Peninsular really driving this level of the market," the valuation firm continued.
Realestate. com.au reported that 2019 was the first time more outside buyers were searching for properties on the Northern Beaches than those within.
The inner-west and eastern suburbs were key regions, with factors such as infrastructure upgrades including the B-line providing faster commuting options to the CBD, increase in flexible working arrangements allowing individuals to work from home more frequently, and the affordability of the area in relation to other Sydney regions proving key factors in this shift.
At the prestige end, Palm Beach is synonymous with prestige and a large number of these properties are owned by high net worth individuals from outside of the Northern Beaches, however there is also a strong local prestige market along the coastline, the report noted.
67 Edgecliffe Boulevard, Collaroy Plateau (pictured above) is currently on the market through Knight Frank with a reported initial guide of $10 million, roughly $5 million above the suburb record.
According to the HTW report, this brand new luxury asset is sure to appeal to both local and international markets due to the ultra-modern finishes, unique position and unbeatable views.
"Whilst we have not seen any recent change in market sentiment and values to date, the outlook for the prestige sector remains rather uncertain.
"If the current global economic turmoil continues, we consider this will likely have a negative impact on demand and value levels," the valuation firm concluded.