2023 was a good property market to buy and sell property, with great prices achieved across the Lower North Shore. We take a look behind the data at the trends we saw last year.
A return to normality
Over the past three years, the Lower North Shore has experienced three very different types of market conditions in quick succession.
2021 was a year of tremendous growth, as Sydney’s median dwelling price rose almost 25% in the pandemic property boom. Then, in 2022, we experienced a slight softening as the market recalibrated.
In 2023 we saw a bounceback and a return to relatively normal market conditions, with respectable growth across our area. It was neither a bull nor a bear market; rather, the status quo of steady growth resumed.
According to realestate.com.au, the median Mosman house price rose by 8.4% to reach $5.2 million, and Cremorne house prices experienced 10% growth to hit a median of $3.8 million. In Neutral Bay, the median house price rose 7.3% to $3.31 million, while the median apartment value lifted 8.8% to hit $1.188 million. Meanwhile, the median value of apartments in Milsons Point rose by 11.7% to $2.3 million.
As one of Sydney’s blue-chip suburbs, Mosman made several appearances on CoreLogic’s Best of the Best Report for 2023. Mosman houses (number 1) and apartments (number 3) were both listed for the highest total sales volumes of any Australian suburb. Mosman also came in at number eight on the most expensive suburbs in the country.
Cremorne Point and Milsons Point made the list for both the best-performing and most expensive apartments in Sydney.
Supply and demand
One of the contributing factors to last year’s price growth was low supply. However, data from SQM Research reveals that, over Spring, we experienced a more consistent and fractionally higher volume of listings than we’ve had over the past few years. This made it easier for people to find something to buy, allowing for a little more movement in the market.
CoreLogic reported that the first weekend in December was the busiest auction weekend of the year, with Sydney recording a healthy auction clearance rate of 63.9%.
In our area, we also saw many properties selling prior to auction, which contributed to our low rate of just 18 days on the market.
Strategy matters
Because of this return to “regular programming”, sellers needed to be strategic in 2023.
In a booming market, price growth, strong demand and buyer competition can make up for many inefficiencies in selling strategy - and in 2021, it was almost a given that a sale would go well. When the market shifted in 2022, it put more responsibility on real estate agents to develop and execute a comprehensive selling strategy.
This continued into 2023, with the best sales underpinned by a well-considered and well-executed strategy.
There are several ingredients to a good selling strategy, starting with a realistic price that takes the current market into account and a sales method that’s tailored to the property. The basics also need to be covered. The property must be well presented and prepared cosmetically to target the likely buyers. This often requires making minor adjustments to the property while being careful not to overcapitalise.
We don’t just open the front door at open homes; we take time to get things right and aim to bring value to the table. Part of this is having a team of tradespeople on hand to help.
We found that in 2023 the market responded to well-publicised listings and a “seen everywhere” approach, which fuels a fear of missing out (FOMO) and drives competition. We left no stone unturned by using targeted social media advertising alongside the real estate portals, print advertisements and editorial, and database marketing. We also worked closely with buyers’ agents and relocation agents.
What about interest rate rises?
While rate rises made headlines and impacted the broader property market, we found that most people in our area had been preparing for the possibility of rate rises over 2023 and were not caught by surprise.
In fact, a return to interest rates of around 6-7% was also another return to normalcy in many ways, and experienced buyers would be familiar with these conditions after a decade of low interest rates.
That means the so-called “mortgage cliff” wasn’t visible in our market. We did, however, observe some choosing to offload other assets they owned, such as holiday homes or investment properties. But in the main, the local market stayed strong.
A focus on the family home
Since the pandemic hit in 2020, more buyers have been focused on creating the perfect lifestyle at home. We saw this continue in 2023, particularly when it came to size, with larger, prestige family homes and luxury apartments both popular.
This is also part of a wider trend where people see investing in the family home as a strategy in and of itself. As one of the last remaining tax-free assets, trophy homes on Sydney’s Lower North Shore have been a reliable and safe way to build wealth. The family home is an investment that you get to enjoy, and it’s infinitely useful, too, especially with kids staying at home longer.
Because of this, we’ve seen people’s wish lists change and grow in recent years to include multiple entertainment zones across different levels, as well as additional flexible spaces like granny flats or guest accommodation.
Over 2023, the area known as “Balmoral Slopes”, from Chinaman’s Beach to George’s Heights, was incredibly sought after by families, and we saw larger, five-bedroom homes in Mosman outperform the median, rising 9.6% over 2023, according to Domain, to reach a median sales price of $8 million in December.
We also saw the biggest returns on finished homes with stunning renovations. There was still a little bit of reservation around renovating or rebuilding thanks to construction costs. We forecast this will turn the corner over the next couple of years as the pressure on construction eases and services become more available.
The apartment market gains strength
We experienced increased buyer demand for apartments across the board. For example, in Mosman, buyer demand rose by 24%, according to realestate.com.au, while it increased by 33% in Kirribilli.
Downsizers are a key buyer demographic in our area, and they drove the apartment market, especially when it came to larger, prestige apartments.
In 2023, Lavender Bay, McMahon’s Point, and Mosman Village were all popular with downsizers. However, there’s a scarcity of larger apartments across the Lower North Shore, and those that come onto the market were quickly snapped up.
We’re glad to see some newer boutique developments coming onto the market specifically aimed at downsizers, with fewer generous apartments and excellent amenities.
A changing buyer demographic
A decade ago, around 80% of purchasers in our area would be locals, and they remain a strong contingent in the property market. However, in 2023 locals made up only around half of purchasers.
The remaining 50% of buyers included an increasing number of international buyers and expats. In fact, according to Domain, Mosman was the third most searched Australian suburb for overseas buyers.
We also saw many out of area/interstate buyers coming from the Upper North Shore, Eastern Suburbs and Melbourne.
Again, this demonstrates the importance of casting the widest net when marketing your property for sale.
2024 on the Lower North Shore
As we enter a new year, the fundamentals underpinning the market don’t look to be changing, and we anticipate a strong year ahead.
If you plan on buying or selling on the Lower North Shore in 2024, contact my team today.
