Property market check-in: Aussies are searching for granny flats and gardens, shows new report

The pandemic’s influence on the property market is being felt in more ways than one, shows a new report from Domain on the NSW housing market.

The New South Wales Spotlight Report shows that Australia’s most expensive state is finally on the downturn for property prices after a long upswing. 

Aussies are also changing their housing habits after experiencing the realities of lockdown, prioritising outdoor spaces and coastal suburbs. Top ten search terms including “pool”, “balcony”, and  “garden” across Sydney and Regional NSW demonstrate the desire not to get stuck inside again.

What are people looking for in their property?

Findings show some differences between property searches in Sydney and in wider NSW. Number one in both is the classic search term “pool”, popular in rural and urban areas alike. Other search terms in the top ten for both Regional NSW and Sydney include “granny flat”, “waterfront”, “view” and “new”.

The desire for extra space is clear. While Sydneysiders are more likely to search for properties with the search terms “balcony”, “garden” and “courtyard”, Regional NSW has seen the demand for prime locations with key terms like “river”, “beach” and “water view” all adding to the top ten. The rising work from home trend has also played into the property market, with “study” being the number two search term for Sydney properties in 2022.

What has changed in the NSW property market?

Though changes to property prices have been seen all over the country throughout the pandemic, NSW has seen some true extremes. The three suburbs that have experienced the greatest growth in prices are all NSW hotspots - units in Byron Bay have increased in price by 104.3%, units in Jindabyne have increased by 77.2%, and houses in Mollymook have raised in price by 62.4%. 

While there has been a downturn, it is minor compared to the amount of growth prices have experienced. Take the median Sydney house price dropping by $315,000 - after having gained $927,000 in 12 months leading up to the peak. 

It is, however, a small amount of relief. The amount of time a property will spend on the market also appears to be slowing down (with the exception of units in Sydney, which remain the same). Sydney houses are spending an average of 8 days longer on the market, with regional NSW houses also averaging an extra day for sale.

NSW has been largely affected by the changing migration patterns throughout COVID-19. With more people leaving Australia than arriving for the first time since 1946, Sydney has been disproportionately impacted. Demand in regional NSW and interstate continues to be fuelled by a desire to work from home or break from an urban lifestyle, while a lack of international immigration affords more room in the property market.

With that said, it’s easy to see the difference between the property market of today and two years ago. At current, 62% of Sydney houses and 16% of Regional NSW houses have a median price over $1 million, up from 44% and 1% five years ago, respectively. 91% of suburbs saw house prices grow more annually than incomes, and that figure is 33% for unit prices.

Meanwhile, NSW has rolled out changes to tax options for first time buyers, wherein land tax can be opted into over stamp duty. This could come at a welcome time, as the Domain report notes the changes to the state’s stamp duty: “Since 2002 Sydney house prices have risen 280% while the cost of stamp duty has escalated 406%.”

Due to the nature of NSW as Australia’s largest state economy, there are points of difference to other property and rental markets across the country, and we can gain important insight by making some simple comparisons.

All up, the NSW market may be shifting, but it seems to be a gentle turn - not a dramatic downward swing.

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