Having started out in the commercial real estate sector in 1996, and hailing from a family of real estate professionals, there isn't much that Principal of Belle Property Berry, Nick Dale, hasn’t seen throughout his real estate career. But what he is witnessing in his local market at the moment, in terms of competition for properties and record-breaking prices, is totally unprecedented.
“As an indication of how competitive things are right now, 18 months ago there were 142 listings across our region; fast forward to today and last week there were only 19 listings. To give an idea of how prices have risen, one property which sold for $1.6 million four years ago recently sold for $5.5 million,” said Nick.
Located in the Shoalhaven region, Berry is a picturesque town famed for its heritage buildings, boutique shopping and numerous eateries. Surrounded by lush rural landscapes and nearby sweeping beaches, and only 143 km south of Sydney, it has always been a firm tourist favourite, but these days it is becoming better known for attracting Sydneysiders seeking expansive (and increasingly expensive) rural lifestyle retreats.
“We are seeing an influx of buyers from Sydney, predominantly couples nearing retirement age seeking a rural property for their second home,” says Nick, who attributes increasing demand for such properties to the impact of COVID-19.
“With international travel off the agenda since the closure of Australia’s borders last year, people are bringing forward their retirement plans for large lifestyle properties on acreage, which are also big enough to host extended family gatherings, particularly on major holidays like Christmas,” he said.
And according to Nick, money is no object for this cohort of buyers. "I haven't had to deal with banks and valuers anywhere near as much as usual. The majority of sales these days are cash.”
Taken together, all these factors are driving huge competition for these lifestyle acreages, which are being snapped up almost as quickly as they come onto the market.
“As long as the price is fair and in line with market expectations, savvy buyers who have searched for a while will move rapidly to secure a property, knowing if they procrastinate, they will miss out.”
"For one 100-acre property, which is this demographic’s sweet spot, I had 5500 enquiries alone, and had to take on a co-listing agent just to manage the volume of interest. The final buyer hadn’t even set foot in the property when he paid $5.5 million for it sight unseen,” adds Nick.
The battle to secure a property in this beautiful part of the world is also caused by a shortage of listings, with many vendors, especially older ones, hesitant to sell fearing they won’t be able to find another property. While younger vendors can be more comfortable taking the risk in order to profit from peak market conditions.
All of which makes for a vicious property cycle, as Nick explains, “Vendors nervous about finding their next property don't list their current home. This means there aren't enough properties on the market, fuelling fierce competition and leading to the record-breaking prices we are seeing at the moment.”
While it may be a sellers’ market at the moment, things are expected to return to a more balanced state in the near future. No doubt to the relief of buyers still trying to secure their dream property in an area previously better known for its vibrant dairy industry than luxury real estate.
“We are predicting that as New South Wales progressively moves out of lockdown that this will lead to an uptick in listings in the coming months. This should reduce some of the pressure on the supply side and tilt the scales more in favour of buyers, giving them more choice and potentially more bargaining power,” concluded Nick.