Regional property market driving NSW sales spike

Both Sydney and regional NSW were back into the upswing phase of the property cycle in the three months to November, according to the latest CoreLogic data. Sydney dwelling values were up 0.3%, while regional values were up 3.1%. For regional NSW, this is the highest quarterly growth rate through 2017. Indicators are showing the regional NSW dwelling market is still on the rise, despite the recession. Every regional market in NSW has seen an increase in dwelling values since March through to November. There were around 18,000 regional dwelling sales in the three months to November, up a remarkable 23.3% on the same period in 2019. Looking forward to 2021, NSW dwelling markets are generally expected to remain in upswing, but pockets of the market are at risk of further decline. "Nationally, housing market values did not see the large decline anticipated at the start of the COVID-19 pandemic. Housing values fell just 1.9% between March and September before moving into a recovery trend, increasing 0.4% nationally through October and 0.8% in November," Eliza Owen, CoreLogic’s Head of Research Australia said. "Relative to previous housing market downturns, the current decline through to November seems relatively mild, with dwelling values just 0.7% below the pre-COVID levels. There are numerous factors which have contributed to the prevention of a larger downturn in dwelling values including the institutional, coordinated response to the pandemic, which have seen low borrowing costs, added incentives for first home buyers and the extension of mortgage repayment deferrals limiting forced sales." "Despite an initial slump in housing finance through the beginning of the year due to the COVID-19 pandemic, the year to October saw a remarkable 14.5% lift in the volume of finance secured for the purchase of property, according to ABS lending indicators." "The post-COVID mortgage lending boost was driven by owner-occupiers including changeover buyers such as upsizers and downsizers, as well as buyers getting into the property market for the first time." "Money lent to first home buyers saw the fastest growth rate at 35.1% in the year to October, accounting for 22.1% of lending, up from 18.8% in the year prior. Meanwhile, investor mortgage lending increased less than 1% in the same period. There are several factors that contributed to this growth in first home buyer activity, including generational trends, monetary and fiscal incentives and lower dwelling values and competition," she concluded.