Suburb Trends February 2021 | New popular suburbs post-covid

We are taking a look into the changes in demand for suburbs, before and after restrictions.
Kent Lardner & the hosts took a look at the most popular searched suburbs from a year ago and discussed whether being popular then resulted in price increases.

The 10 most searched suburbs in Australia were in Sydney and Melbourne and they fit in two buckets, aspirational and affordable. Listen and find out which performed better.
Here’s what we covered:

• Why is regional NSW looking strong for both units and houses?

• Why will the Sydney market always run hot?

• Where is the mass exodus of Melbournites heading to and what are they buying up?

• How does an outer edge suburb like Hornsby experience such rapid growth?

• Who were the owners that saved the Paddington and inner east terraces?

• Who will miss out at auction in Melbourne and how are home buyers preparing themselves to purchase?

RELEVANT EPISODES:
Episode 162 | Stuart Wemyss
Suburb Trends December 2020
Suburb Trends November 2020

LINKS:
www.suburbtrends.com
Australia's most popular suburbs revealed

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in February 2021

Veronica Morgan: This is our first suburb trends report for 2021. Here we are in February, and we'll be looking at where prices are moving across the country or the up or down, and why they're moving in this episode, we'll be taking a short walk back in time and looking at the most popular suburbs at the beginning of COVID will the list look the same today?

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker.

Kent Lardner: And I'm the data game.

Chris Bates: Before we get started, I need to let you know that nothing we say on air can be taken as personal advice. We always recommend you engage in the services of a professional.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free full forecast report, which experts can you trust to get it right? The elephant in the room.com did I, you, This month's focus is online search activity and what it tells us about buyer demand. So Kent, how are we going to approach this data episode?

Kent Lardner: Yeah, so what we've done is we've identified those 10 most search properties. We focused on a list published by REA, which was a house house search. So we identified the 10 suburbs we've gone through. We've created something called a suburb story, which allows us just to go through a data item by data item, including a nice big data visual we've taken an aerial view image of each other. Give us a bit of a, a handle on what the suburb looks like. And then

Veronica Morgan: You fancy actually on your website, which will have the link in the notes. Obviously,

Kent Lardner: Look, I think the great thing for me since using these aerial images with doing the suburb reviews is you get a much better grasp on it than you would on the ground looking at listing or a map. You know, I know Chris said or favorite thing looking at maps, but you don't get a feel for the suburbs. Whereas these drone images or helicopter images at that right height, it's just such a wonderful way to get a good grasp of what the suburb is.

Veronica Morgan: Yes. So, okay. So where do you want to start? Do we look at, do I just want to list through what those top 10 suburbs were and then we sort of hit them a bit, one at a time. Do you wanna do that?

Kent Lardner: Yeah, let's go in. So we've got a we'll list them off quicker. We've got new South new South Wales button, new town, which we all know, you know that all too well. Yeah.

Veronica Morgan: Can I interrupt? Obviously a will and I have, but you know how every episode you put something from new castle in

Kent Lardner: There is no new, I'm sorry, there's nine Newcastle, but you phone it in. Yeah,

Veronica Morgan: Well, well new town is where I live and that is top of list right. A year ago. So let's just hope it's still easy.

Kent Lardner: Well, we'll find out South Melbourne Hornsby up the road Albert Park down just on the outskirts of Melbourne CBD there. Watsonia in Victoria Brunswick in Victoria, Paddington in new South Wales where you know that all too well up to your neck of the woods, Chris Collaroy then went back down to Victoria Hawthorne and then Balmain. And again, that's a space that, you know, all too well, as well as muscle.

Veronica Morgan: That's where my office is. Absolutely so interesting. So these let's just also say these aren't where the top 10 for growth or top 10 for prices or anything like that. This is actually the top 10 most searched suburbs a year ago.

Kent Lardner: Yes. So let's start with Newtown. So I'm looking at prices now, obviously the disclaimer on prices is we always worry a little bit. If there's not enough sales volume in the suburb, they can be a bit rubbery, but with a lot of these suburbs, they do have half decent sales volumes. So using a rolling 12 month median, they are not too bad when we're comparing prices are up to about a listing price at the moment on average, just about 1.45, the new town. And if you go back about a year ago, that was about 1.4 I'm rounding, but there has been a steady, a steady jumping in asking prices in the housing market now, interesting. I think the biggest thing that we've found with COVID, it's been the impact on high density units and especially somebody like Newtown because of the proximity to the university. So if you look at prices, there, there hasn't been much movement at all. It's probably increased by about $5,000, which by Sydney standards at the moment, it's not a big increase in price. If you compare it to what's going on in other spots like Collaroy Chris,

Chris Bates: I need you to thinking about Newtown. Is that what we've seen is so 12 months ago, though, the pressure cooker was building enormously because the market had bounce back from, so after that election, you know, market really run late 2019. So early 2020s when this was done everyone thought they had to go to the city. You know, that was COVID hadn't happened really yet, or the lockdowns and said, a lot of buyers were looking at that inner West pocket as the one part, you know, for first-time buyers is where they would be thinking they could get a house in an area that want to live. And so I think what that area hasn't been, what a lot of people first-time buyers have been looking at at the moment, because they're going well, I'll move down towards the North of Portland gong, I'll go to central coast or I'll go to the beaches or et cetera, but you can kind of see why that would have been such a hot suburb 12 months ago is because really it was one of the only pockets people could buy lifestyle, buy a house that they want to raise a family.

Chris Bates: That's also kind of near the city. That's that's that it doesn't surprise me that new

Veronica Morgan: Town's kind of top

Kent Lardner: Of the list and just fantastic rail services.

Veronica Morgan: Yeah. Yeah. We can see that in your drone image. It's funny. I mean, I lived in STEM or while I was renovating my house in Newtown and STEM was on the train line, but STEM or is it only has one line, you know, it's only on one line, so trains come every 15 minutes, whereas new town, there's a number of different lines from that station and it is, it's so many more trains available and which is interesting, not that I catch the train that often, but when I do, it's obviously something that I really like, but I, you mentioned apartments as well. There's actually not that much in the way of high rise apartment in new town. I mean, there are some, but it's certainly not. It doesn't have the density of some other suburbs around like Alexandria for instance, which has only two suburbs away, but there's a massive density there and in creasing and then that's right on the edge of Zetland and, and a green square, et cetera, et cetera,

Kent Lardner: Put a stop to that. There was a big push about 15 years ago or 10 years ago to get some units built over the rail there down near McDonald town and the local, the locals really put a big stop to that.

Veronica Morgan: Yeah, they did. And there's Erskineville as well. I guess what I'm saying there though, is that the knock on effect is of having all of their developed over development on your doorstep does mean that that impacts on growth for apartments in neighboring suburbs, even though they, that actual suburb may not be massively over-developed. Yeah. And, and, you know, I tell you what though, the moment new towns is hot, hot, hot, you know, every time we go to open house is cues around the corner, mind you that's everywhere. And, and also it's exacerbated by those agents who are actually taking the COVID safe approach seriously, and actually limiting the amount of people inside the house at any one time. So it can look like even a less popular house will have a queue out the front as, as will a very popular house, you know, so, and I actually, I got an, I've got a little sneaking suspicion that might be somewhat contributing to a little bit, the FOMO that's out there at the minute, like a nightclub. Yeah, yeah. There's the bouncer. Oh my God. That's hilarious. Yes. The nightclub effect anyway. So, so, but do we have any search data to compare, right?

Kent Lardner: It was their top, their top 10 most searched suburbs a year ago. I thought, you know, what, a year on let's dig deep and see if that search criteria or that search really resembles anything in reality. And obviously there's been, it's been an interesting year to say the least. But you know, the standout for a suburb like new town is that, you know, it does have a few units in the unit market has been impacted marginally by COVID and the university. So, you know, there's not an abundance of unit stock. I'm at the moment I'm looking at it. There's only about 13 on average 13 units for sale. So that's not going to have a massive impact. But you know, as you said, days on market, it's just, it's 24 days to S you know, on average, that means half the properties out there are selling in the less than 24 days.

Veronica Morgan: Yeah. And also you got to think with auctions, auction can actually push the days on market out a little bit, you know? So really anything, I think an auction campaign and an auction campaign really almost runs 24 days. Hang on. Sorry. What about South Melbourne? Cause of course, you know, that's an inner, obviously an inner suburb. That's, it's got a lot of similarities to Newtown in terms of proximity to the city and style of architecture as well. So our property what's and, but of course, poor Melbourne had a full four months really locked down when not much was happening in the property space. And I hear that, you know, it's come out of the Gates raring to go, yeah,

Kent Lardner: Melbourne, I think across the whole of Victoria at the moment, you look at the maps that we create and it's a bit mindblowing, it's hot housing markets are hot everywhere. It's only a couple little pockets, our usual suspects, which are the house and land regions. But outside of that, it's just a sea of a high demand, low inventory across the whole state is mind blowing, but talking about South Melbourne. Yeah. Very similar in price, obviously the new town, I think at the moment, you wouldn't find too many properties below a million, it's about 1.58, eight. So about 1.6 million is your typical median price for a house a unit at the moment about five 25, they are going down. And you just mentioned earlier, Veronica, I think South Melbourne is being impacted very much by those high density suburbs that are adjacent to it. There's a reasonable volume of houses listed at the moment and a very mixed bag about 19 houses listed for sale. So and some fascinating properties when I had a bit of look through that, we usually do, you know, I thought, Oh, gee, there's a renovators dream, but a bonafide, the one that you could pick it up and, you know, do a great job with and turn it into a, a healthy profit. So yeah, I, I, it's a fascinating suburb. Yeah.

Veronica Morgan: But on that, I mean, the thing is, and this is where it's hard to, because you're talking about median prices and we've discussed media in Atlanta with you around the weaknesses and problems with using median. But you sort of don't have a better alternative, right? Because in in the suburbs, such as new town where there's quite a wide diversity of properties, you know, you've got your little tiny workers, cottages and terraces right up to sort of multi-million dollar, you know, renovated Y to terraces or sort of converter warehouses or whatever. So there's, there's a fair spread. And I, I think South Melbourne has somewhat similar compositions. So therefore the median can be skewed by lots of little houses selling all more of the bigger ones.

Kent Lardner: Oh, it's crazy. Yeah. We've got the pro on the suburbs stories that were all the reviews that we've put up here. We've got all the price segments, which I know you love and love that. And so I've done a better version of that. That versions are version 20, 21 of it. And on the chart, we've got South Melbourne, for example, the bulk of your sales are up above $2 million. And, you know, what's included in that is a lot of your development sites and whatever. So yeah, when you're, when you're talking about medium prices, it's just, can't, you've got to take it with a grain of salt. You've almost got to say of the properties listed today. What do I, what what's, what's the typical price of a property listed today? I wouldn't look at it or phrase that to say how much a price has grown.

Veronica Morgan: He's he's a question for you. And I don't know the answer, but it's a request that I have for you that I've been meaning to give you,

Kent Lardner: You got to put me on the spot and I will, you know,

Veronica Morgan: Can you please extend the upper price bracket beyond 2 million?

Kent Lardner: Yes. Yeah. Okay.

Veronica Morgan: Well, the listener, so price, the, these price segmentation grass, which I do love, they do visualize and to show you exactly in each price bracket, how many properties are transacted in the previous 12 months, or it's a percentage you express that as a percentage, don't you, and it's really valuable. But the problem is when you've got a property in suburb where your median price is, you know, maybe one and a half million or more there's, you've got a whole bunch of sales checked in the 2 million plus bucket, but there's no differentiation beyond 2 million where you might have properties at three or two and a half or whatever. So that will be really valuable for those more expensive suburbs

Kent Lardner: Will. I'm just, it's just showing my age for Monica

Veronica Morgan: At what prices were when you left Sydney, sorry. Back to Sydney, we got Hornsby completely different type of market. This is really on the outer edge of Sydney, but the Northern sort of on the, on the, really the edge of quite literally the edge of Sydney, but it's very bushy, very suburban, but very established. I mean, it was sort of developed really about what, 30, 40, maybe even 50 years ago.

Kent Lardner: Yeah. But I mean, it's, it's one of those trained talking about the train station, fantastic train line that verge is out and you can get down to Sydney via two pathways. So it's well serviced. It's got a lot of good schools around there as well. And it's one of those markets that, you know, our recall a couple of years ago saying, Oh, this is looking a bit wobbly. Whereas right now it's hot. And you know, the REA search credit to, to their analysis it is a hot, very hot market right now. So that market, in terms of what median growth have you seen? So the last 12 months to 2021, yeah. Look I, in terms of the, the house prices you were looking at around 1.1, 4 million a year ago, that's jumped up to close to closer to 1.3. So there's been a big shift in that units are haven't really gone anywhere. So, so, you know, flatters attack on the unit space from my perspective, but what is a standout? I think that it's very tight for listings. Again, same story, that same problem, everywhere else at the inventory level or the market conditions as I like to refer to it, you know, w we're talking one of the so many suburbs now are below one month of inventory.

Chris Bates: So that doesn't surprise me with Hornsby. You know, you think what's happened over that last year. People are willing to go further than they were before. So a lot of people want to live on the North shore and they were happy to go up the upper North shore, but they wouldn't really want to go all the way to horns, but just because of the commute time starts to blow out on the trains every day. But, you know, in a world where you only have to potentially come in two or three days, then you're willing to make that sacrifice. Right. And so you can get bigger houses out there on bigger blocks, surrounded by Bush land and still trying to the city when you want to. And you've got the North connects going in there as well. So we were seeing clients go there just because of affordability in that sort of one to 1.5 range, you've got a lot of sort of first-time buyers that that's what they can afford and they want to get something they can grow into. So, you know, you can't buy something much closer to the city down that train line, if you want to be in the North side. So that's another reason why it's a very good price point for sort of, you know, first-time buyers,

Kent Lardner: Mike Santee, anything I'd call out there is the vacancy rates are up above 4%. So, yeah, it's just a question of whether that will have a spill over into the unit market in the coming months.

Chris Bates: Oh, there is a lot of units there on the main roads and around the train station and, you know, a lot of the places in the North shore, there's, there's lots of units getting built on Pacific highway. Yeah, that, yeah, but I guess if you're moving up there, you know, you're not going up there to rent. The reality is you might rent for a short period while you sussed the market out, but most people make those big decisions to go and buy something up there. So, you know, it's the rental yields and investors. It's not really something that you know, that's not the market you want to be playing in the buying market or the selling market.

Veronica Morgan: What makes me sort of sad, I guess, for all those people buying that brand new, those brand new apartments on that, that North, that corridor Pacific highway. And, you know, because, you know, it's all, it's that whole home bias too, you know, a lot of North shore owners and people that live up there, the guy just get a nice little investment property around the corner and appreciate it, et cetera, et cetera, et cetera. But they're not really thinking well, who is the tenant going to be? And yeah, the demand just isn't isn't there because it exactly that's been built because the state government has said basically each local government area has to build more of this stuff. So not because there's really a demand for from actual owner-occupiers to inhabit these properties.

Chris Bates: There's some downsides of stuff though. I mean, I have seen you know, like where you've got a lot of people and then also they don't want to leave their, they've got their friends, their community, and they do want a nicer, bigger apartment, might be, you know, a six, you know, three bed apartments, you know, in a good straight. So there is some of that stuff getting built, but it's cheap and cheerful box you know, things that look like microwave, they're the, they're the ones,

Kent Lardner: What often happens with these new builds, you know, where there's a whole stack of new properties coming on for rent is the rent. It does influence the rental price often, but here it hasn't. So we've seen rental prices dropped by about $10 a week. So even with that new stock coming on, prices have come down.

Veronica Morgan: Yeah. Yeah. That's interesting. Cause there's usually a, like a blip with increased rentals, but then it does come down when you've got no demand. Like you've got at the moment, you know, too many apartments available for rent across the whole city. Now Albert Park to Melbourne

Kent Lardner: And doesn't it look beautiful?

Veronica Morgan: It's so pretty. Yeah. To look this way.

Chris Bates: It's probably the most beautiful suburban Melbourne for my, my view anyway. Right. You've got the Bay heritage houses for the massive, big double frontage. Everyone's been run up. Everyone's renovated tree-lined streets. Yeah, literally 10 minutes from the city. It's a pretty amazing suburb.

Kent Lardner: You'd probably be looking at around, you'd need a budget of around $2 million to be playing there at the moment. Not, yeah, not a lot of, of listings. So at the moment I think you'd probably find up around 16, but you know, blink and that goes down to below 10. So it it's a, it's a hot and hard market to get into unit wise. There's not a lot of units there, so that does protect, you know, that does protect the market somewhat. It's again, a lot of these hotspots are all below, you know, around that 24, 25 days on market. So things move very, very quickly. The inventory levels are low. So it did come off a peak of around four months. But I, I think with a lot of metrics in and around Melbourne, we're still just seeing some of the aftereffects of lockdown, but it's a hot market regardless. I think it's down to about two months of inventory. So yeah, it was very strong. And then

Chris Bates: This one, okay, is this the dreamers like search? It's not really, and this is what REI getting better. And I might not know looking at this sort of stuff as well, where they're trying to, you know, break down the amount of data they get is ridiculous to me, they've got access to the best data in the property market, but how they cut that data up takes, takes skill. Right? Can't you're a dad.

Kent Lardner: Yeah. Yeah. I, I would personally, if I were down there and they said, can't help us out, I'd be dumping it into machine learning and then tying it to things like inventory. And then what you would do is you'd find that it may not work in the dreamy state, you know, say, Hey, just because I'm looking up near Noosa doesn't mean I'm moving there. It's because I'm bored in my unit in Melbourne.

Chris Bates: Yeah. But park is one of those suburbs. Right. But, and I property, you know

Chris Bates: But yeah, that's, that's kind of one of those areas where you can just, you know, spend hours and hours just dreaming of a home that you're never going to be able to afford.

Veronica Morgan: It's a little bit the same in Paddington Hawthorne and Balmain actually. I mean, so, you know, but it, but he's funny cause in this list, you've got new town, South Melbourne and Brunswick, which are the sort of inner city affordable options, you know? So you've sort of got a bit of everything in this list, but where the hell is Watsonia.

Kent Lardner: Yeah. Well, you have to kind of look at the map to, to know where it is. It's Northwest of Melbourne. 

Veronica Morgan: Yeah. How far Northwest, look it up while we're talking.

Kent Lardner: Well, that's how long arc and in traffic it's going to be about an hour.

Veronica Morgan: Oh my God. Well, why the hell people looking at there? What is there just, you know, I'm an urbanist, don't you? Yeah. Yeah. So do you have any ideas on this? Hey, it says it's 16 kilometers Northwest. It's not that far. It's like

Chris Bates: Interesting. So I reckon this one is similar to Hornsby because that reality is what Sony are, it's on a train line and that train line is pretty decent. It goes to the city and you've got, it's really full of green sort of elephants got clients by their [inaudible].

Veronica Morgan: Oh, it's in that area. Yeah.

Chris Bates: Well like surrounded by trees. And there that's a pretty, pretty place to live. And it's still sort of affordable. What's the median here,

Kent Lardner: 90 at the moment in your listing price. So it's a, God, it's all decided that's affordable, isn't it? But

Veronica Morgan: Yes, it's all relative though, isn't it?

Chris Bates: Mm. Yeah. It's more affordable. Say if you go a little bit on the other train line, which is like the Preston reservoir, you know, you don't get much for a meal. Right. And so you can go a little bit further to the West. There'll be surrounded by lots of Parklands and things like that. And it's much more, you know, that under around a meal, Mark's probably where a lot of first-time buyers are in Melbourne, maybe a little bit more in Sydney. And so, yeah, it's still in that sort of first home buyer get family homes, you know, established suburbs, reasonable schools, all that sort of stuff.

Kent Lardner: There's only about five at the moment on average. So not much at all. So yeah, it's it's days on market, I think we've got around what, 28. So yeah, it's very, very similar, but yeah. Inventory level, very tight one month of inventory.

Veronica Morgan: Yeah. So it's continued. So it was high on the list last year. It looks like it's high on list. Again, it's still high on the list, but yeah, it is interesting. Cause once again, it comes back to that affordability. So what's coming into this list is, is that once again, that combination affordability slash aspiration. So another affordable option for as an, in a CD taught before debility is Brunswick in Melbourne, it's very similar to new town. I like it there and Fitzroy

Kent Lardner: Working class roots at the moment just over a mil. So yeah, that's interesting. So that'd be re you know, I think reflective of the style of houses, obviously a lot of small block terraces they, so just over a mill but a year ago it was about the same price. So this one's kind of looking at, you know, at the moment, you don't have to say the search, the search, the high level of search hasn't really been reflected in massive shift in the market or an increase.

Chris Bates: So I took a massive suburb it's, you know, was like three or four train stations in that suburb. And there's a lot of nicer properties in that sort of mid ones, like three, four better town houses on, you know, three, 400 square meter blocks, which is quite big for Brunswick. Eric and they're going really well. But then there's lots of two beds and, you know, smaller three beds on smaller blocks which I think will be driving the median down because, you know, they're not as desirable as they were prior to COVID because, you know, people want a bit more space and they haven't got to get to the city as much. And so people are willing to go a bit further. I think in Melbourne and go, you know, maybe they go to Coburg and they get a three, 400 square meter block at the same price if they wouldn't have been willing to do prior to COVID. Cause they said, well, let's, I want to get that commute time down as fast as possible. And so that's, that's an interesting one, Brunswick you know, cause those, those dynamics, it needs that pressure cooker the same as Newtown when the city's hot lively people want to live in Newtown, they'll want to live in Brunswick

Kent Lardner: Or a big, big surge in listing. So there was about 46 properties listed on average a couple of months ago. So that's down now to about 23, but that's fascinating because you have to go back that would, that's kind of why up there and much bigger than what it's been in the last couple of years,

Veronica Morgan: But would that have been a result of really just everyone coming out of the Gates locked down? So I guess, and actually I've just noticed in this list, it's only Sydney and Melbourne it's basically, well, I guess that makes sense that top searches for REA group are going to be in the most populous cities, right. You know, there's 5 million, nearly 5,000 people give or take in each city. So poor old, we won't know what the top searches suburbs in Brisbane or, or Adelaide or what, you know, Perth are going to be in this list. We'll we, we ask them to do it for us. Well, should we should, but actually in the article we will, the source article for this episode we'll put the link in the show notes, but what's funny is that and I did through that and had sort of some top 10 search for units and had things like Sandy Bay and Tazzy, and I'm thinking Hobart, I'm thinking, Hmm, I'm not sure there's a massive amount of units in Sandy Bay. You know, these lists make it out there, but it's like, are they really useful? And anyway moving on Paddington

Kent Lardner: Addington so again, that's another one of these suburbs, w wasn't someplace place where the razor gangs really were well known. This was a rough, got it. Okay. But going back to a hundred years ago, it was pretty rough. Now it's now

Chris Bates: Probably 300 years ago. It's a fair point, Ken, but we're in 2020. So yeah,

Kent Lardner: Knowing my age again, I just, I got $2 million maximum bracket that God,

Veronica Morgan: Well, I shouldn't say, I mean, can I first met you at Balmain, you know, sold your house in Balmain? That was pretty rough to back, you know, way before you bought there

Kent Lardner: A thing. So at the moment about the, the average listing is going to be around that $2.5 million Mark. That's the rolling median over the last 12 months. If you go back a year ago, that was 2.25. So that's been a big jump, a very significant jump in prices there you know, units eight 50 to nine. So there's been a jump in unit price, median asking prices as well. So that's quite big. Again look, the, the, we didn't have the same lockdown, but there's been that same ramp up. So about three months ago and I guess yeah, it's odd that it was peaked at about 34. So we saw an average of about 34 listings a few months of a couple of months ago. That's down to about eight now. So that's a really interesting observation to see a ramp up of activity and now very, very, very few properties available.

Veronica Morgan: No everything's flying out the door. It's sort of interesting. Cause you know, we, we look in Paddington, I've got some clients looking in Paddington at the moment and you know, obviously watching, you know, what comes on the market, it's always difficult to buy a good property and to find the property you know, this isn't just unique to the current market and everyone's saying, Oh, you know, listings is a problem, but it's sort of like, well, we did get quite a bit come on the market and it all got bought. So it's, it's, it's the balance of supply and demand. It's, it's not just listings because you're never going to get, you know, five times the amount of listings that you might get, but you will, you can get five times met a buyer suddenly out there. The other thing too, is that you know, the affordability thing kicks in at times and then all of a sudden the next suburbs will start looking at appealing, you know? And so yeah, the old ripple effects,

Chris Bates: But I mean, Paddington's got something very unique about it. I mean, we could argue with Laura shows some of those similar traits cause they kind of cross over, but you know, that people are always wanna, you know, have Paddington potentially if they won that terrorist a city life, but also access to the water and the beaches really that's your option. Right? And so, you know, and Paddington's oil is that one that if you want that life if there's any opportunity to buy it and then a lot of people are in Paddington just want to upgrade to a bigger terrace because it's always, they need more space and there's never enough space that people get stuck in these smaller terraces because there's no other options besides leads the suburb. You know, there's not actually that many big houses that are affordable well that on the supply and demand piece though, it's less than half a month inventory. So yeah.

Veronica Morgan: And it's, it's a problem. The same dynamic really happens in Balmain. You know, that people will stay in a small place because they're desperately not, you know, the desperate not to leave the area. So there is that upgrader. And in fact that in a way that's sort of one of those respites, it's one of those ingredients in a recipe of capital growth, you know, are you in an area that people want to upgrade within and stay within and that's going to put me well, it also keeps them more prepared to pay more money to stay there, then an outsider coming in. But yes, it's, it's an interesting market at the minute I have to say in Paddington and you know, I don't, I'm not sure if I told this to her on the podcast before, but there's, this is show on the ABC it's it's Oh, it's an old show it's called, who's been slipping in my bed and it's an anthropologist that goes to peoples.

Veronica Morgan: So somebody might have an old house in the thinking of what's the story and these old house. And you know, he goes and digs into the history of it. And there was a couple that owned this property in Paddington. And so he dug into the history of all. Why are they so many of these intact Rosa terraces impacting Tim because you know, there's other suburbs in Sydney where they're around, but they're not as intact know it's been a lot more about mine have been demolished for instance, than in Paddington. And it turns out that just in, in world war two, sorry, one, couple, yeah, one couple in world war two, the subs came into Sydney Harbor and everyone got freaked out and went to sell out a Pato, get the hell out of here. The Japs are coming. And so there was this mad Exodus and this couple and where they went over there and they were a child free.

Veronica Morgan: Couple of them were Jewish apparently. And they were, they were like refugees from world war two. And they, they started buying up these terraces. And over the years they accumulated something like 90 terraces. They were massive slumlords life, basically never. They did all their own maintenance. They never renovated any of these properties. They did the bare minimum to keep them livable basically, but they, you know, and they, they died and, and I don't know that they obviously got left to somebody and all got sold, but the interestingly enough, this is why you've got this in the sixties and seventies when there was just some pretty horrific know demolition and redevelopment going on in other suburbs, it didn't happen in Paddington because this couple owned so many properties. So there you go.

Kent Lardner: Well, yeah, well we, I think we all should thank them.

Veronica Morgan: Absolutely. Thank you for not touching and ruining these. These are not renovating these houses. You know what I mean? That the very fact that they've been left in tight with the integrity and their original features may not have been great condition, but it's pretty rare.

Kent Lardner: That is fine. And thank the green band for saving the rocks

Veronica Morgan: Is serious, is bearing on the market. Now my sister is in Italy and she sent me a link for it. And I was like, that's hilarious. Anyway. So kicking through every finish, your Paddington,

Kent Lardner: We'll move up to Collaroy cause we want to, we want Chris to to talk to one of his favorite subjects,

Veronica Morgan: Is it, is this, can I say, is this potentially another, another Hornsby made possible because of COVID and there is no train line up there

Kent Lardner: Color Roy, I think it's, you know, let's say you're moving from the East. A lot of people are moving from East in a West to the beaches. Just coincidentally, I actually drove through and I passed an open in Collaroy on the weekend. And I don't know if it was what you were talking about, Veronica, where it was a COVID reason that the queue was huge, but these was a ridiculously poor street. You know, cars flying past each other and the queue was massive. And what the people are doing is they go to buy and say, Fairlight and Manley, God, it's expensive here. Let's go to freshwater. Let's go to Queenscliff, let's go to nanny vow. I know we don't want to go that far away from the beach. Let's keep going up the coast. And Collaroy sort of, you know, it's I guess a good option. But that's getting too hot for people and our people are going over. So you sorta Narrabeen and worry would and things like that. So yeah, that doesn't surprise me the colorway because it was a little bit cheaper than say the freshies and that sort of area. So you get a lot more for your money, especially up on the plateau, but this is Collaroy.

Veronica Morgan: So what's happened with prices. There,

Kent Lardner: Look, the prices have been pretty flat, but the inventory levels have gone down. So this might be a really interesting case of a compositional shift. So but you know, price wise a year ago, 2.45 was your average listing price. And then we'd come back to today. It's about 2.54. So a marginal increase, but not, not significant when you compare it to where inventory levels have shifted. So it could very much be one of those scenarios that we often call out that, you know, if the only thing that sells other lower end properties or only thing that sells is the upper end properties, you will see that impact in the prices actually more lower end properties have sold as a proportion, keeping that median. And you only know that by doing the deep dive and I didn't do enough homework.

Veronica Morgan: Well, you also only know that when you're on the ground. And it's interesting. And I remember certainly as a sales agent, you know, people be coming in, they would have read up some data and they'd say, Oh, prices, Balmain of falling. I'm not paying that for that. I'm like, well, plenty of other people will, so you'll get the kick me sing out. And it's like the using this macro data and not understanding that we're prices in Barmah, might've been falling that year because know no waterfronts had sold, you know it's actually, but, you know, however, all those little worker's cottages they're going up and you know, if you're trying to buy it for last year's price, you're not going to so it's that understanding the local dynamics is really important, but I've, we sit down and for every property that we evaluate, we do a very rigorous pricing research on it.

Veronica Morgan: And one of the things that we do, we look at how the median has moved in sort of three monthly steps over the past 12 months. And it's look, it's an indication because we want to then sort of compare that to our sense on the ground. And I keep a monthly record of really what's happening to, to compare that against. And it's really interesting, every single suburb at the moment, a year ago to now the median has gone up at least 20%, at least in every suburb that we've been working in, that I am working in. Yes, yes. And, and, and then you see it sort of it's so that's from a year to now. And then you sort of see for the last sort of in three monthly patches, you know, even since November where we're, we're looking at sort of quite often a 5% increase since November. And I know it's the median, but it's, it's, it's very indicative and it's, it's a pattern that's pretty much repeated suburb after suburb. So

Chris Bates: I think when a lot in the next couple of months, because it'd be a lot of auctions and especially in Fe Lightfair, you know, late March, when does it really start to dial for anchors? Is it kind of late may, is it auction, stock closing

Veronica Morgan: Some years, it never dies off, you know, and this is the thing. So we, the clearance rate concha domain, and I've been following using domains clearance rates for years. So I can't change now because that's, you got to use the same source. Right. But I'm, so it was 88%. So last weekend now, February is typically the highest, you know, in a typical year you get the highest clearance rates in February because there's that pent up demand of buyers. You know, that haven't had anything to buy at auction for say a six week period over Christmas. And then of course you get new buyers entering the market after Christmas and you get people reentering the market. Who'd given up at the end of last year, end of the previous year. So you do get, you know, you get three groups of buyers, basically all converging when there's no stock.

Veronica Morgan: And so that's pretty typical to get, you know, strong market conditions in February now in a normal market where, you know, yes, you'll start to see that listings will increase the, you know, the, our buyer to two, each seller is going to decrease and it sort of slows down a bit, but then it ramps up a little bit over Easter because Easter is a period of where people don't want to list. And then it slows down again, intimate and into winter. But then into winter, nobody lists their property. Again, it starts ramping up the time it slows down normally is the end of September. And that's usually at the point of the year when the listings and the buyers tend to meet numbers, how however in last year, obviously completely disruptive year and it certainly didn't slow down. It didn't spring did not happen in a property sense. And you know, so this year, if the way it is started, you know, and the sheer volume of buyers out there compared to which property who knows, who knows whether it will slow down or not,

Chris Bates: Should be kind of go overseas and travel locally, which is probably what meant there was not a lot of the agents weren't going on their summer holidays and the Greek islands 

Veronica Morgan: Straight to what 2% or whatever. So, you know, it's, yeah, it's a different, it's a bit of a different world and there's a shitload of FOMO out there, which is alarming really. Anyway, so there you go. Good news. Everybody.

Kent Lardner: She called her Roy the unit market's actually quite a buoyant very tight inventory there and that's backing the trend. Yeah. And when you can sit with that, well, about 53% of the all total dwellings in the suburb units and apartments. So that's that's a really interesting observation, I think,

Veronica Morgan: But is that and look, I'm not overly familiar with that area, so are they, I know there's been a bit of new development up there.

Chris Bates: Literally just down the road and it is literally like Highrise heaven or hell look at it. Ubut D was actually, I'd still buy an apartment in D Y if it was literally on the beach side of things, people want a road and, you know, close to the beach, you know, not near the sort of the shops and things like that, cause that you kind of get hit with it. You know, you're looking up at these big apartment blocks and you're in an old one, but those little, there's a couple of little beautiful little,ustraits of little old apartments. Some have got pretty cracking views up on the peninsula on the kind of the Headlands there. Ubut yeah, Colorado hasn't really got that. It's quite flat,uas a couple of big tall apartment buildings on the water there that

Veronica Morgan: Yeah. Famously been saved from falling into the water.

Chris Bates: Yeah, that's right. And it's just been completely renovated there. That is an amazing building. Like you would definitely want to own an apartment if you're going to buy one in Colorado. Cause it's just outstanding views. It's just, you know, it shouldn't be built. It's a little bit like the horizon building in Darlinghurst that somehow got through council, you know, 20, 30 years ago. And the only stands out like a sore thumb, but it's got amazing views.

Veronica Morgan: No, the building it's amazing. Yeah. Hawthorne.

Kent Lardner: Cool. And back down to Melbourne, back in Melbourne, I I used to travel through Hawthorne a fair bit down working for a real estate portal down Melbourne a few years ago. Yeah. two, 2.1 million. I just looked at the screen was taking a few seconds to load up. So that was just me trying to fill in some time, 2.1 million would be a typical median list price back then. I didn't do a good job covering up there. 1.8 million about a year ago. So in terms of asking prices, that's been a fairly significant job. So, so yes we would support the REA story there. Unit wise they have also gone up, which is surprising because there's a lot of units around there, but I didn't get a lot of that to the new stock. There's so much new stock around that part of the world.

Veronica Morgan: Yeah. And here's the thing with new stock when it hits the market, it sells at a premium compared to established stock, which makes it look like prices are rising, but it's actually not it's once again, it gets back to that composition of, of the data. However, we did have a conversation with with Stuart weeds and we released it only this Monday all about apartments and, and, you know, he's Melbourne based. So of course he's, he's very familiar with those areas and we did talk about Hawthorne. So if you're interested in the apartment market and you should listen to that episode,

Chris Bates: Well, I worked there year you know, maybe it was 2012, I think it was, you know, what Hawthorne's sort of Camberwell area. And they weren't building too much then, but I know that over the last five years that has built a lot of this stuff that suits downsizers. And so it's the real bigger open plan sort of three bed apartments that are maybe around closer to 1.5 to two mill. And even on the busy roads, but you know, there might be six or eight, you know, two or $3 million, like in Rose Bay, in Sydney and in Balmain as well, they're doing those. So yeah, that's, it's kinda like they really should be compared to the housing market because they're really like the same sort of floor you know, spaces say as houses rather than, you know, 80 or 90 square meters. There's a, you know, maybe one 50, 200, so they're big apartments

Veronica Morgan: And look, there's some good developments in Melbourne. I know that that really are targeting the the downsize a bit and begin to think about this. Some of the beautiful homes that are in Hawthorne, I mean talk about aspirational you know, Victorian Italian, it mentions, you know, lots of beautiful, big terraces. Like it is a very, very pretty suburb with, with a lot of that heritage. And so of course, you know, like you say, downsizes, they sell out of a big house like that and they do want to stay in the area. And that's, so that's a bit of a no brainer, but yeah, one, but that's also that, that thing we talk about about, you know, the, the, the difficulty with breaking down data and also understanding particularly in the apartment market, cause there's, you know, you've got your, your investor stock right up to, to that sort of downsizer market, which is a completely different kettle of fish. So, you know, to be able to slice and dice that you need to really have that local knowledge

Kent Lardner: Inventory levels a year ago were in that super hot territory of, you know, around one month, but they've jumped up a little bit now. So they're still in the hot territory. They're about two, two and a half months of inventory. So that's kind of back the trend a little bit. So I wouldn't say softening to the wrong term, but it's not getting hotter and hotter. It's it's just modestly come off the boil, but it's still hot. So is it houses the houses? So the houses were tree level. It was below one when this report came from REI a year ago, but now, now it's crept up to about 2.5. So, but again, you wouldn't go 2.5. You wouldn't say that's half the level of imagery 

Veronica Morgan: To everywhere else. You might look at Hawthorne as maybe a bit of a buying opportunity at the moment.

Kent Lardner: But units at the moment are sitting at around just about five months. So there's been a significant step change there. So I think a lot of that's obviously relating to a lot of new stock

Veronica Morgan: And then bow Maine, as I often call it the cherry on top of the inner West cake cherry on top of the icing of the nos cake, you know, it's it's three Ks from the city as a, as the Crow flies. It's a, it's a peninsula. So it's surrounded by almost surrounded by water on three sides. And it's got a village and very embassy transport city lots of terraces, lots of pubs. So palms love it. Do you tell what's the story there,

Kent Lardner: The prettiest aerial image of the mall, I think,

Veronica Morgan: Hmm. It would be with all that water or that Harbor around it and parks

Kent Lardner: Beautiful. Around $2 million is your average asking price for a listing? That's kind of a, well, that's up to a hundred K compared to a year ago. So that's been trending upwards unit wise about 1.18, three, so close to 1.2 million for a unit there. But if you look at the price, segmentation for units is very bi-modal, you've got a lot of expensive water view apartments, and then you've got herbs that are sitting back, obviously, you know, that all too well for Anika.

Veronica Morgan: Yeah, well Maritain did a huge two huge developments and we're talking now over sort of 20, 25 years ago and Austraila and then deed and Greenland's did an enormous one, but that was with very, very large apartments, really targeted that sort of the North shore downsizer. And that was sort of done around roughly around the same time. And then, then Australia and did a massive development and there that's actually in Roselle, but it's on the peninsula. And after that there's been little developments, but there's been no available land, you know, so to Abu. So yeah, there's been some smaller redevelopments, et cetera, et cetera, but that's, that's it in terms of volume of new supply? Yeah, so they just tick over now and, you know, there's always that wants to buy a unit in Belmont.

Chris Bates: So I haven't looked at it for a while, but I know that there was planned quite a lot of development potential this next decade with a new Metro station at white base, which is the sort of South end of Balmain. Not on the other side of the waterway. You've got all the wolfs and the docks there. That's potentially all going to be redeveloped as well. So there potentially could be a lot of new apartments that are going to be just on the edge of sort of our main and you know, around that sort of Harbor there around the dock lands. So you've got to be a little bit careful in Balmain if you've got something near that pocket, that's pretty bog standard. Really? Yeah.

Veronica Morgan: Can I, yeah. Can I say that there, you know, when I say there's always a buyer, I'm not saying everybody should buy that stuff. You've got to be quite discerning. There's a lot of really pretty ordinary stuff in there. You got to pick the it out of it, but you're absolutely right down on white Bay, but that has been on the cards on the table for decades now it's a big part of it is this whopping great old power station and the decontamination cost is prohibitive at the moment. So they're waiting for land value effectively to get to a certain point where it's cost effective actually decontaminate it. I think, I think that's, you know, but there's been a bit of a white Bay has been a bit of a white elephant, the sense that, you know, there's been so many attempts to, to repurpose it, but it's been a real challenge. The state governments, you know, heavily involved in, in this whole precinct. But I don't think anyone's really landed on the right master plan or the right the right combination. So God knows given that that's really been on, on the go now it's being discussed, well, at least 20 years, it could be another 20, you know, who knows how long it's gonna to

Chris Bates: Potentially. I mean, the, the train station is a hundred percent happening. And so that's, you know, order already been approved by the state government. And that station is getting a bill by 20, 28, 20, 30 sort of time. So I think I just looked at the map, it's sort of Roselle Bay

Veronica Morgan: That's nearly 10 years ago in, in head. So, you know what I'm saying? It could take 20 years, [inaudible]

Chris Bates: Getting sort of built out. Exactly. Yeah, yeah. But it is happening. So it's not like a case of now once you've got your train station in there, then you know, it's much easier to sell the lifestyle. So the properties, you know, access to the city access to Paramatta. Yeah, exactly. So it's and, and all the West connect stuff is kind of getting done now, now that spaghetti junction at Rosella will be done in 10 years. So I don't know. I think it's a pretty amazing spot, but there's almost that whole area is a construction site for the 2020s. Yeah.

Veronica Morgan: Yeah. It's a bit of a bit of a shocker that, that little corner of the world. Yep. All right. So that's been interesting that the 10 most searched suburbs got an from a year ago is to look at where are they now? You know why he's wearing a next episode. We are going to talk more about sort of, well, you know, everyone's saying the market across the country is hot. You know, regional's hot, cities are hot, Darwin's even hot, isn't it. Boom, boom. You know, where's not hot. And we're going to talk about where it's not hot in outside the, the, the usual suspects or the oversupply. So that's going to be next episode, but before we sort of it's one up, if you got an anomaly for us.

Kent Lardner: Yeah. My anomaly is that the, the search terms has not necessarily related to growth in all markets.

Chris Bates: I'd love to get REI. We'll get, we'll ask Cameron or narrator to say Phil, come on. And I say, I know when we look at the REI data, they've got a released these sort of weekly insights on trends or how many people are searching and how much is it up as a percentage oversight, not a certain point in time. And it's looking like 50, 60% rise in the last 12 months. So yes, there could be Draymond's yes. There could be people just thinking about upgrading, but not taking it serious, but then you'll be a part of those searches that are actually sending inquiries to agents and booking on you know, open homes and requesting contracts and all these sorts of things. And that's the key, like how much have they reasoned? I'd love to get REO to sort of come on and talk about it.

Veronica Morgan: It's like the whole country's come into the property market. Isn't it. Everybody wants to move it just want a bit like what it feels like out there

Kent Lardner: Selling overseas. I mean, you'd be getting inquiries from ex-pats there's a lot of people looking to move back. Yeah, yeah,

Veronica Morgan: Yeah, yeah. We, we had a bit of that. It's interestingly enough, though, expensive and wanting to invest, you know, and, and text-wise that, you know, the situation has changed and it isn't as appealing to them as it has been a previous user. However you know, it's a bit of a flight, the whole flight to safety, isn't it.

Chris Bates: If finance is still an issue for them, it really is you can't, you need a 30% deposit to borrow anything decent. And it's still here cottage for exchange rates, your bonuses aren't counted et cetera. So it is still tough for experts to borrow any a significant amount of money. Even if they've got 30% deposit and the end of that, then yeah, good luck. You're not going to get something, but yeah, that that's holding it back. If there wasn't changes with bank policy with expats, I think you'll see a massive increase in sort of people from overseas wanting to buy that it potentially Aussies overseas looking to come home at some point.

Veronica Morgan: Interesting. Well, yeah, as I said, I've had a few, you know, we've got a few expat investors on the books, so they were obviously got good jobs and good equity, I'd say, all

Chris Bates: Right, well,

Veronica Morgan: Thanks so much, Kent. We'll see you next month. Look forward to that. And yeah. Strap yourself in guys on

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