The PROPERTY DOCTORS, Sydney Australia Novak Properties

NOVAK NEWS - NORTHERN BEACHES PROPERTY MARKET WRAP : 2024 OUTSHINES 2023

• Bidhan Shrestha & Harry Lorcas • Season 29

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What if the Northern Beaches real estate market could hold the key to your next big investment? Unearth the secrets of an evolving market landscape in our latest episode as Harry and Bedhan guide you through a year of remarkable growth and shifting dynamics. Harry shares his personal journey through his inaugural year in the real estate industry, highlighting the fierce competition in the rental sector marked by open inspection events attracting up to 40 eager groups. As we journey through the year, you'll discover how a balancing act unfolded, offering renters a more stable environment while the sales market in areas like Dee Why defied expectations with an impressive 11% growth, edging back to peak 2021 price levels.

Join us as we reflect on a year filled with surprising resilience and robust market activity, and look to what the future might hold amid potential interest rate changes driven by inflation concerns. We extend our warm wishes, hoping you too have celebrated successes or embarked on new ventures, like purchasing a home. As we close out this episode, we reflect on the year gone by and eagerly anticipate the opportunities and challenges that 2024 might bring. Here's to a prosperous new year and a hopeful outlook on the evolving real estate landscape.

Speaker 1:

All right and we are live. Monday Novak news. Bedan and Harry. Yes, we're back. Yes, last Monday Novak news for us for the year. So we'll be doing a market wrap of Northern Beaches. Stay tuned while we go to the stats what the sales and rental market has done in northern videos. Harry, how have you been?

Speaker 2:

Well, well, well, we're back yeah that's good.

Speaker 1:

How was the?

Speaker 2:

day Interesting.

Speaker 1:

Yeah, not too bad. It is quite this time of the year, not as stressful and running around as the whole year, but it has been an interesting year.

Speaker 2:

It's been an interesting year. It's been a rollercoaster, lots of ups, lots of downs, both in the sales and in the rental market. So it's been an interesting market, interesting year.

Speaker 1:

Totally, totally. We like lots of talks and the interest rate has been the biggest talk throughout this whole time Like, oh, we'll wait for it, oh it'll go down, oh it'll go up. And weirdly, it has been the same throughout the whole year and I think that changed lots of things for lots of people and I think we'll slowly go down. But yeah, let's start with you Harry.

Speaker 2:

Yeah, so rental market after first year in real estate it was actually a very not only awkward time to join, to start in the real estate industry, but I'd say a little bit stressful. Like I remember at the start of the year, january, february was when I started average average groups when I was doing, when I started off with my open inspections was, you know I'd see 20 to 30 groups for a property, for a two-bedroom, one bathroom, one lockup garage in D white for about seven hundred and fifty eight hundred dollars a week. And at the time you know you know a young in starting off in the, in the in the real estate market is it was quite daunting at the time. You know you know a young in starting off in the in the real estate marketers, it was quite daunting at the time. But like you know, um a lot of high numbers, um I I think that just from you know experience speaking, like right now, I think low vacancy rates was a really, really big cause of that because you know you had um a lot of people.

Speaker 2:

You know there was a lot of competition in the market at the time. You know there was just so many rent increases from high mortgages, mortgage prices. So yeah, you had a lot of competition in the market, in particular rental markets. So yeah, we were just seeing 20, 30, sometimes even 40 groups showing up at our open inspection. So yeah, a lot of crazy running around. And I would say that it did sort of start to plateau later on in the year, but I don't think we actually saw a plateau up until, I would say, september. So we were still seeing a lot of rent increases, increases. I remember, I think Tina, my colleague, did about 70 rent reviews a couple months ago and we managed about 350 properties in our pods. So yeah, 70 rent reviews was just an absurd amount.

Speaker 1:

So would you say right now, like there's not as many rent increases, you're not getting that high, stupid rent yeah.

Speaker 2:

Look, I think we're still getting rent increases. You know, in the rental market we're always going to see rent increases, that's just you know the general market over time is going to exceed, it's going to go up.

Speaker 2:

I don't think we'll see any stupid rent increases like $100, $150, $200 increases, which I was seeing with my own bare eyes quite often, but I don't think we'll see those anytime unless we go through, obviously, knock wood, another pandemic which will influence things. But yeah, there wasn't too many after that time period because, yes, things did slowly start to plateau. You know you started to see numbers come down with, you know, open inspections, so your level of competition did start to come down. But yeah, it has slowly. I would say the rental market has overall slowed down.

Speaker 1:

It's kind of coming to a balance. I think it's good for renters out there who are still looking to rent. I think now you kind of have that balance. You don't have to fight with too many people. Kind of having that bit of ease, sales is still pretty pumping on the hand.

Speaker 2:

Yeah, how's the sales market? What's going on there? It's pumping.

Speaker 1:

Throughout the whole year. Well, we're based in DUI so DUI alone did almost 11% growth, so that's massive.

Speaker 2:

Is that in houses and apartments or in general?

Speaker 1:

And that's with interest rate and hold. So that's scary. 2021, I think that's you know, with the pandemic, like, if you look at the last five years, it's a bit tricky to go there. But 2021, as everyone knows, rental and sales, they all like off the charts, they're at the peak. And 2022 and 23 it's when the market corrected itself and, weirdly, now we're at the exact same high. So if you look at the last five years and we look at the median house prices in northern beaches in general, it's pretty much reaching the same level at the pricing in 2021. So the median house price in 2021 was 2.69 million million. Right now it's 2.67 million. Last year, last year it was 2.4 million. So it's kind of done this. Yeah, so it corrected, the market corrected itself and then it went back up again. But all this growth happened when the interest rate was on hold and, like mentioned before this whole year uh, february, the industry will come down. Oh, by mid year, the interest rate will come down but before christmas we'll definitely see interest rate cuts.

Speaker 1:

But here we are at the almost the end of the year and interest rate up, pretty much at hold. And well, now they've been talks of it going back up again because inflation is going up. They haven't reached the targeted figure and there have been talks that maybe it might go up. So all those hopes of interest rates coming down and you buying your property might be a bit different, yeah, but at the end of the day, everyone has strong predictions. No one actually knows what happens unless it happens. So the market, you know, at the end of the day it's a buyer's market and unless a buyer pays a certain amount, the house is not going to sell. So that's a bit of a thing we have to clear out ourselves because it's not.

Speaker 1:

An agent asks $6 million for a property.

Speaker 2:

No one just magically pays for it right.

Speaker 1:

So, at the end of the day, unless a buyer pays for it, the facts and figures for rentals were actually.

Speaker 2:

I wouldn't say it surprised me, but it was quite interesting to see the stats because this year up until, I think, in July around August that time period houses the average price for a house per week was $1,565 and that was up 24 percent this year and that was from at the start of the year just to until July, so that's not even like recently.

Speaker 2:

That was within a six month period 24 percent and, funnily enough, units which everyone thought units was going to be, you know, increasing, yeah, units were only up 11.7 percent. So houses did better. Houses did a lot better. If you had a really nice one and a half, two million, two and a half million dollar house, you know, around narrowina chroma, that would have rented beautifully if you had a house.

Speaker 1:

So they did actually really good investment.

Speaker 2:

They actually rented yes, almost double um than units, and that was that's average prices, so that's taken into consideration three, betters two betters one betters. You know all the layouts um average prices. So that's, that's an interesting statistic, that's great.

Speaker 1:

I think pretty much. I have to agree we have the same thing. So for sales, uh, january, february are fairly quiet for us, as you know. Everyone's just easing in from the christmas and new year, uh. But as we moved to the mid year that we are getting like an extraordinary prices for properties, you know they were getting great results.

Speaker 1:

But as we moved later towards the spring period, which is considered the busiest period for sales, like we're getting sales, like we sold properties in like day two, day three or some even in day one, but they were not getting that in over the top, you know, over expected figure, they were selling at market value. So like at the end, I think that what happened? It kind of started to plateau a little like throughout the year. It just increased because everyone were waiting for that interest rate, interest rate and once they didn't see, I was like okay, like it is what it is. So if they started, I think kind of some might be frustrated or too tired looking at too many properties, because it's uncertain time. You literally don't know what to do and everyone's predicting our industry will come down and when it doesn't, it's kind of a bit tough yeah, so yeah, um bedan predictions for 2025.

Speaker 2:

It's a big question. This is, this is uh we'll do a sales and rentals one. Yeah.

Speaker 1:

So with sales, well, people, when people say we're gonna wait, I always have a little giggle.

Speaker 2:

I'm like wait for what.

Speaker 1:

And they will say, oh for the interest rate to come down. But the tricky bit is if the interest rate comes down there'll be more buyers on the market. If I'm able to afford a 800 grand apartment interest coming down, I might be able to go for one mil. So doesn't that mean there will be more competition in that one mil range? And you know if people are not selling in this tough period.

Speaker 1:

Why would they sell it? Interest coming down yeah, that means less stock, more buyers. So it's the old classic supply versus demand. Yeah. So I really don't see the point, personally, why you want to wait for. Yeah, you know, and it should come down, unless you want to increase your borrowing capacity. But by the time you at the you know property market grows up, you end up paying the same yeah so it's always, you know, good to just buy it, and at some point it'll just correct itself it's like you know right now, when you say oh, 10 years back.

Speaker 2:

Oh, I should have bought that property, yeah, you know the same thing will happen after 10 years.

Speaker 1:

People will say, oh, I should have brought in 2025. Because that's the norm. Property value always goes up. You just have to make the right choice at the right time. But I think next year the same thing is going to happen. Right now we are pretty much at the lowest stock for sales, Probably sitting around 500. And two weeks earlier we were had 975 properties for sale.

Speaker 2:

Oh, wow, so that's decreased by 100%.

Speaker 1:

Big drop so that's been a big big thing there. So stock rates have come down a lot. Lots of property will come in late Jan to early Feb, but I don't think that will increase much of a chance because people would still like to wait for that first meeting in Feb or in March yes it is a bit of a tricky, tricky period and I don't want to start anything by saying, oh, definitely this will happen, because, yeah, no one actually knows what's gonna happen.

Speaker 1:

But definitely, looking forward, I think the market will definitely improve and go much higher, because I did increase this whole year with all this uncertainty of interest rate. I think next year is only going to do better yeah yeah.

Speaker 2:

I think in the rental market, I would say, in the long term I think tenants are going to have a lot more flexibility in terms of, you know, rent increases, because I think when interest rates come down it gives, you know, landlords, vendors, owners, a little bit more breathing space in terms of their mortgage repayments.

Speaker 2:

And when you think of the tenant paying their rent, it's a massive chain where it starts with the cash rate, then it starts with the RBA, then it goes to the banks with the interest rates and then that's when it affects the landlords and then that's when it affects the tenants. So it's kind of like a domino effect, if you put it that way. But in terms of landlords paying their mortgages, in the long term, when we start to see those rate cuts, it's going to when the cash rate starts to come down a little bit, then that's going to bring interest rates down and then that's when you know it's going to give landlords a little bit more breathing space and then in the long run tenants aren't going to see those major major rent increases.

Speaker 2:

So I think, towards. I normally like to allow like 12 to 18 months for that to happen, so it's more of a longer term effect. But yeah, I think in the new year, going towards 2025, 2026, I think that's what we're going to start to see. That's great. And actually, which is good news to hear, because I think this year, I think both landlords and tenants, everyone just had it hard. Yeah, it was really unfortunate.

Speaker 2:

Yeah, pretty much neck to neck and I think we're starting to see the light at the end of the tunnel, definitely in the next couple of years.

Speaker 1:

And we, being in Diwa in particular, we know good things are happening around here as well. There's, particular we know good things are happening around here as well. There's a big development project that's been going on for uh, for a while now and I think by next year we might see four new buildings, wow, and they'll all have, you know, 200 apartments each, so lots of stuff but weirdly most of them already sold.

Speaker 2:

Oh, that's the off the platform.

Speaker 1:

So that's the tricky bit. So there have been, uh, four big projects going around in the east side well, three on the eastern side of bit water and one a bit, a bit far up but more closer to the beach. So and they're pretty much all sold already. Yeah, pretty much. So you know they are coming, but most of them are sold. We might, which might ease up a little because it'll increase this number of stock, and you know people might sell because they are moving into the new apartment, they might sell their current one. So it might be a bit of hope there as well. But yeah, new stock are definitely coming and DY in particular sells more apartments than CBD.

Speaker 1:

So that's interesting and with you know, more new apartments coming, I think it's only gonna get better. You know people might buy it as investment, good for the renters, or you know people might want to live in, they might sell their house, they might be downsizing. Uh, you know, moving closer to the beach in the apartment, that's always the goal in northern beaches. So I think, yeah, that's uh pretty much all from from me anything.

Speaker 2:

Yeah, I think that's it covered everything.

Speaker 1:

Stats definitely verdict say overall it's, uh, definitely been a very good year, and hopefully it's been a good year on your end as well. Never know, next year you might be looking for your first property, or your first investment property, or a second property. Lots of things can happen. And yeah, pretty much we just wanna wish a happy new year from you Happy new year and I hope you all had a lovely Christmas.

Speaker 2:

All the best. Yeah definitely Signing out. Signing out. See you later.