The study shows a decline in Sydney unit values as house prices hit record highs
Main points:
-
The unit prices in Sydney were $20,000 less than when the pandemic started.
-
Sydney's house prices, however, were $13,000 above the high in 2017.
-
In the sense of the adoption of remote working conditions, regional NSW property prices rose.
House prices in Sydney hit a record high at the end of 2020, however, according to a new survey, harbour city units have lost the most value of all capital cities.
After a leap of almost 5 per cent, the median house price in Sydney in the December quarter was $1.21 million, the Domain report said.
That, in mid-2017, is around $13,000 above the previous record.
But the gap continued to widen in Sydney between houses and units, the report showed.
In Sydney, the value of units dropped by around $20,000 from pre-pandemic levels, the largest fall of all capital cities.
Nicola Powell, Domain senior research analyst, said that the housing market had "defied the odds" with gloomy predictions that failed to come to fruition early last year.
With regional NSW outperforming Sydney, the COVID-19 pandemic had altered lifestyle habits, she said.
"I think with the ability to work remotely, we have seen it drive demand to outer suburban locations but also regional areas as well," Dr. Powell said.
Important government support initiatives, a "remarkable rebound" in consumer sentiment, mortgage holidays and a decline in property market activity affected last year during the lockout period.
"All those things together did help to support prices, but that dip in price we recorded mid-year was short lived for houses," she said.
Louis Christopher, SQM research managing director, said Domain's figures were marginally higher than other data providers, but there was no doubt that it was a good quarter.
Prices rose by around 2 or 3 per cent on SQM figures in Sydney and Melbourne, he said.
However, for the quarter in regional NSW and Queensland, SQM reported dwelling price increases of more than 8 percent.
Mr Christopher acknowledged that work-from-home arrangements partly clarified why houses outperformed units, with individuals wanting room and privacy.
He said a housing crash, mainly due to government grants, was averted in 2020.
"We had high unemployment, we had a recession, we had the closure of the international border — all of those things would normally spell disaster for the housing market," he said.
Nationally, according to Domain's numbers, house prices hit a record high in all capitals except for Darwin and Perth.
CoreLogic put December's median house price in Sydney at $1.01 million earlier this month, while the median unit price was $733,852.