Acreage Market Wrap - 26th July 2020

Hi, my name is Greg Vincent and welcome to this week’s Acreage Market Wrap where I share an insight into How’s The Acreage Market?

Recently, I’ve had a couple of people ask me “should I buy an acreage property now or should I wait?”
So, this week I’ll share some insights that may help to answer this important question...

Figures out this week showed that Sydney’s north-west is the sole pocket of the city that has escaped house price falls despite the pandemic taking a toll across the property market, with new infrastructure and blocks of vacant land luring home-buyers. Domain’s latest House Price Report found that House prices rose 3.4 per cent in the region – which takes in suburbs from Epping to Kellyville Ridge – with the median price rising to $1.35 million in the three months to June.

Typically there are a lot of homeowners living within this North West area who feel crammed in and are confined to a smaller residential blocks who aspire to move onto a larger parcel or an acreage property in search of more space and a quieter lifestyle.

As the value of their property has increased by over 3 per cent, and acreage hasn’t experienced a similar increase as yet, making a move onto acreage has become a more achievable option and with historically low mortgage rates, making the lifestyle change onto acreage is currently at the most affordable levels that I’ve seen in years.

Also, as Peter Switzer reported, Australia’s economic outlook is so good that The AFR says the three credit ratings agencies have reconfirmed our AAA-rating at the top of the list, ahead of Canada, Denmark, Finland & Germany.

And as economist from Goldman Sachs, pointed out: “The silver lining is that Australia’s relatively strong fiscal position means that there remains scope for a significant further increase in fiscal support should it be required.”

“Australia has experienced 29 years of economic growth without a recession and has the longest economic growth amongst the major developed world.

One final point needs to be made. Given what this damn virus has done to economies and people worldwide, the fact that it looks like our economy will contract by only 0.25% for last financial year (that ended on June 30) and then only a further 3.75% for 2020 before growing at 2.5% next year, it shows how good our economy is.

To put the economy into a bit of perspective, as Switzer also reported back in May, the Government’s rescue plan from the massive economic effects of the Coronavirus will create a huge budget deficit of $143 billion this financial year, followed up by $133 billion. But the cost to the taxpayer will be, wait for it, $3!

Sure it is $3 a week — so that’s around $150 a year or one cup of coffee a week! That’s not a bad price to pay considering how bad this damn virus could’ve been if the Government had gone cheap on the rescue plan.

These figures come from Chris Richardson, an economist at Deloitte’s Access Economics and being an ex-Treasury guy in a past life, his numbers are credible.”

If you'd like to know more about these stats, here’s a link to Peter Switzer's article.

Now, not only have we seen median price growth happening within the North West which will drive acreage buyer activity, but on top of that, it’s important that you are aware that there’s a number of other factors, and today I'll share 5 of them with you which I believe will have a positive impact on acreage property prices and you may want to seriously reconsider how each of them will play out before deciding to sit on the sidelines waiting to see how this all plays out.

1. The upcoming release of Marsden Park North & Schofields West will see an influx of cashed up acreage buyers who end up having no choice but to sell up their existing acreage to developers and many of these displaced property owners will be looking to relocate onto nearby acreage

...and because it’s likely that a large percentage of these buyers will enter the acreage market at around the same time, they will end up creating a very competitive environment and will likely end up having to pay a premium to secure acreage properties in fringe suburbs like Windsor Downs, Llandilo, Berkshire Park, Londonderry, Oakville, Maraylya, Kenthurst & Annangrove. These buyers will end up setting new record benchmarks for acreage prices and acreage prices throughout other suburbs across the region should also benefit from price increases.

We experienced a similar influx of cashed up buyers from other development areas in 2015/2016 where the acreage prices climbed dramatically.

Plus, as more and more development is released, we will also experience an influx from a lot of similarly displaced acreage buyers moving across from the acreages around the aerotropolis in suburbs like Badgerys Creek, Rossmore & Kemps Creek.

2. When a vaccine is found for COVID-19, along with the increase development & roll-out of the 15 minute Coronavirus testing, the confidence in the Australian economy and demand in the property market will strengthen, especially in the acreage sector as foreign investment increases, the NSW Government rolls out more construction projects along with Social Distancing providing more flexibility in the workplace which will enable less people to be stuck working in city office blocks and plenty of people will take this opportunity to consider better work-life choices, which will increase demand for more relaxed surroundings for those working from home.

3. You may not be aware, but the acreage market previously missed out on the positive turnaround that the housing sector in the Inner City & The Hills district experienced immediately after the 2019 Federal election. The kick-on effect of the double digit median price growth which occurred during late 2019 to early 2020 was literally only a matter of weeks away from increasing prices in the acreage sector, but the price growth stalled when the Coronavirus Stage 3 level lockdowns were imposed on Australia.

4. There was a significant shift that happened during the lockdown period. You see there were a lot of people reassessing where and how they live, and as lockdowns eased, I witnessed a dramatic increase in enquiry for premium lifestyle property from people who want to escape away from the hustle & bustle of the city. If NSW or parts of Sydney end up going into a 2nd wave of lockdowns like Victoria has, I believe that the appetite for acreage lifestyle property will only increase further once the lockdown restrictions are lifted.

5. Lastly, with the lowest interest rates in history, there are a lot of acreage owners who have had their property for sale for long periods who have a very realistic understanding of the current market. I sincerely believe that a vast majority of the acreage properties in this region are currently undervalued, especially when you consider the high prices being achieved and the strong demand for residential homes on small blocks of land that are currently selling amongst the North West housing sector of Sydney.

In fact, making the move from a residential home onto an acreage property could currently be at the most affordable changeover levels that they may ever see and with a large selection of acreage properties to choose from, right now could be the perfect time to finally make that dream lifestyle move onto acres.

How’s The Acreage Market?

Currently there are 389 acreage properties For Sale across the region. This total includes 214 acreage properties For Sale throughout The Hawkesbury, 124 throughout The Hills district and another 51 acreages For Sale within Sydney’s North-West acreage areas of Penrith and Blacktown.

There were 13 new acreage listings come onto the market this week, and there were another 9 acreage properties Sold this week, plus, there are currently 17 acreage properties ‘Under Contract’ across the region.

Out in the field this week, there was an increase in enquiry compared to last week and we had lots of interest at yesterday’s Open Homes. The properties at 45 Archer Lane, Windsor Downs and 6 Kingsley Close went ‘Under Contract’ this week and I’m currently in negotiations on a couple of other properties.

This week I will be launching a couple of places ‘Off-Market’. If you’re actively looking to purchase an acreage and want to get early access to any of these ‘Off-Market’ listings, make sure to register your interest at www.offmarketacres.com.au

If you’re thinking about selling and would like to discover the 12 Simple Steps designed specifically to help you maximise the value of your acreage property, don’t hesitate to give me a call on 0410 526 901.

So, that’s it for this week’s Acreage Market Wrap.

If you’ve got any questions about anything I’ve shared this week or would like to discuss any of your acreage plans with me, don’t hesitate to get in touch.

Thanks for watching, stay safe and bye for now.

Regards

Greg Vincent