Property Market Report: Lower North Shore

Adrian Bridges
Adrian Bridges March 20, 2024

After the first few months of 2024, we’re optimistic about the year ahead for real estate on Sydney’s Lower North Shore.

At the end of last year, we said the market had returned to normality. Now we feel it has moved up a gear and has experienced a return to confidence.

We take a look at the reasons we’re so positive.

Market sentiment

Market sentiment is one indicator we pay close attention to. By the end of December last year, the market had gone quiet, which is typical for the holiday period.

Once January hit, some buyers decided to start their property search and our listings received a steady and growing volume of enquiries - an early sign of confidence. We also saw increased numbers of foreign buyer enquiries.

Collectively, these enquiries resulted in several sales, mostly at lower price points.

Immediately after Australia Day, however, the entire market picked up pace.

From Australia Day until Valentine's Day, attendance at open homes rose dramatically, often reaching triple figures.

At first glance, buyers seemed to have plenty of choice with little pressure or FOMO. However, some of these properties had been listed in 2023 and hadn’t yet sold. SQM data shows that listing volumes hit their normal seasonal low in January, with the majority of properties having spent over 30 days on the market. This flipped in February, with listings doubling, and the majority were brand new to the market.

As a result, we had a busy end to February, as the property market had really kicked into gear.

Our experience is backed up by the data. As we entered March, CoreLogic highlighted early signs of a “boost to housing confidence”, with their national Home Value Index (HVI) growing 0.6% in February and rising 0.5% in Sydney.

Domain has the city’s auction clearance rate sitting at a healthy 71% in early March, and our office achieved a 100% auction clearance rate in February.

The team at Atlas Lower North Shore collectively achieved around $100 million in sales in February alone. Year-to-date, our office has sold over $230 million worth of real estate, with an average sale price of around $8-$9 million. Individual sales ranged from $1 million to circa $30 million (the third-highest price in Mosman’s history), demonstrating market strength across the board.

The impact of interest rates on confidence

While our evidence for market sentiment may be anecdotal, it’s backed up by the Westpac-Melbourne Institute Consumer Sentiment index, which jumped 6.2% to 86 in February 2024. This was its highest reading in almost two years (20 months), which they attribute to easing inflation and optimism that the Reserve Bank of Australia has concluded its cash rate rises.

It’s no secret that rising interest rates over the past two years have had a negative impact on many buyer’s budgets, particularly at entry-level price points.

However, recently we’ve found buyers happy - and able - to increase their budgets by up to 15-20% to secure the property they want.

Now that interest rates are stabilising (the variable interest rate has hit an average of 7.16%), people seem to have more space and time to think and the ability to forecast and budget. Going forward, the good news is that many experts predict that rates will begin to come down this year.

Of particular interest for Mosman is the fact that experts are also predicting the strength in the luxury market will prevail. In January, NAB highlighted luxury sales in Mosman, arguing that the growth in the luxury property market in 2023 is set to continue in 2024.

A case study: 20 Montague Road Cremorne

Typically, most agents will wait until after Australia Day to launch new properties but this year, we tested the waters by launching a number of properties in mid-January. Our strategy certainly paid off and took advantage of the strong buyer interest we’d seen building.

One of these properties was 20 Montague Road, Cremorne, a classic five-bedroom federation-style family home with a pool on a tree-lined street.

On 27 January, we held an open home, with 45 groups (150+ people) attending. It ended up being the busiest open home we’ve seen in the past two years.

It was listed with a guide of $5.75 million but ended up selling for $6.29 million, eclipsing the Montague Street sales record. Not only was it an excellent campaign and great sales price, it also showed the continued buyer interest in family homes in our area, a trend we highlighted in our last market update.

Other strong sales included an off-the-plan apartment in Neutral Bay for $12.75 million, resulting in an all-time property record for the suburb which revealed great confidence in the market's future strength.

What buyers and sellers need to know right now

In our last market update, we talked about how strategy matters if you’re selling in this market, and that is still a key consideration that sellers should have before launching a campaign. The best sales are always underpinned by a well-considered and well-executed strategy.

February has been a very strong market and we believe this sentiment will continue to drive competition over the first half of 2024, despite any disruption an early Easter followed by school holidays may bring.

Buying or selling in 2024?

If you plan on buying or selling on the lower north shore in 2024 contact my team today

Article by Adrian Bridges