You’ve probably read all sorts of commentary about how Sydney residents are vacating the NSW state capital in lieu of smaller cities or regional centres. Some of the commentary has been almost gushing in its delight about the ‘demise of Sydney’ in the wake of the pandemic.
The pandemic upended the world and created new ways to live and work. We were given an opportunity to stay home and reassess what was important. We found inventive ways to continue working without leaving our home office.
In some cases, there’s a lure to locations where population densities are lower too. Buyers might seek out cities barely touched by the pandemic. Or feel drawn to places where they can buy access to waterfront or mountaintop real estate without the multimillion-dollar price tag.
There are myriad reasons why some of Sydney’s population will move on this year, but suggestions that a large-scale exodus is on the horizon are clearly wrong.
There are a number of fundamental reasons why Sydney will remain the city of choice for the vast majority of Aussies and will continue to see buoyant property prices in the long run.
The REAL numbers
The Australian Bureau of Statistics (ABS) September 2020 quarterly data is an excellent measure of population movement. This data is, of course, right in the thick of the pandemic, so it shouldn’t surprise anyone to know that New South Wales saw a net loss of residents.
According to the ABS, New South Wales saw a net loss of 4100 people from internal migration in the September 2020 quarter. In addition, interstate arrivals decreased from 21,800 in the previous quarter to 19,000 in the September quarter, while departures decreased from 25,800 to 23,100. In net terms, New South Wales gained the most people from Victoria (+500) and lost most to Queensland (-4000).
Looking specifically at Greater Sydney, the region saw a net loss of 7800 people in the September 2020 quarter, compared with 6400 in the previous quarter. Sydney also saw a net loss of 4700 people to the rest of the state, compared with 3700 in the previous quarter.
So, yes, people have left Sydney during the height of the pandemic… but what’s often ignored is that Greater Sydney has a population of around 5.3 million. So, when we talk about losing 16,000 people net a year state wide, that translates into approximately 0.9 per cent of the Greater Sydney population.
In other words, it’s insubstantial – certainly in terms of affecting property prices and turnover. So, while it’s evident there are residents leaving NSW and, more specifically, Sydney, the numbers are relatively tiny – and this was during the greatest pandemic any of us has ever seen. Now with the vaccination rollout underway and the future looking more positive, anyone trying to decide whether to leave Sydney, will surely be having second thoughts.
Reasons to stay
So, has there really been a monumental shift in mindset driving swathes of Sydney residents to exit the city and leave our real estate market in ruin? Hardly.
And there’s every indication that for those who stay, real estate values are set to rise further.
Firstly – the path out of the pandemic is well underway. The vaccine rollout will – based on evidence to date – progressively improve economic conditions in 2021. There will be more interstate travel and, in the not-too-distant future, the ability to travel overseas to certain countries. The more we open up, the more our nation’s economic health will improve.
Next – Sydney’s stature among global cities is now riding at an all-time high. The Australian response to the pandemic has been stellar in global terms. When our borders reopen, Sydney will be flooded with new arrivals looking to call Australia home.
Sydney will also remain the economic and employment powerhouse of the nation. For instance, A-grade inner city offices have never offered more attractive lease terms. I believe there will be plenty of businesses looking to take advantage of these favourable conditions, locking in affordable space and contributing some of the savings toward employing staff. Where there are jobs, housing demand will follow.
So – don’t believe all the anti-hype. While the seachange/treechange set might have made moves away from town, Sydney will remain the nation’s thriving metropolis whose prospects for growth are incredibly positive in the coming year.
My big tip! Don’t wait for values to fall. If you are thinking of buying, now is an opportune time to take advantage, particularly for well chosen blue chip apartments. I don’t ever recall seeing such a price disparity between houses and apartments and that gap will surely narrow.
Just call and let us help you secure a Sydney property with excellent prospects for years to come.