The number of new listings coming onto the Spring market is increasing, particularly in Melbourne and Canberra where prospective buyers are now able to inspect homes again after restrictions were eased mid-month. 

Listings have recently surged by 48.5% in Melbourne and 28% in Canberra, compared to 31% in Sydney, where private inspections have continued throughout lockdown. 

The Spring season always boosts listing numbers, but I’d say Sydney’s surge also reflects more owners wanting to take advantage of strong selling conditions in Australia’s fastest growth market.  

Whilst COVID-19 has undoubtedly caused a ramp-up in house prices, it has also resulted in a significant but temporary softening in apartment values in the blue chip inner city markets of our big metropolitan centres, particularly Sydney and Melbourne. 

The important thing to remember is that it’s temporary – prices will go back up again once the international border opens – and in the meantime, local buyers have the advantage. 

As discussed in our newly released annual McGrath Report, the working from home trend coupled with the closed international border has led to a significant supply/demand imbalance favouring buyers. 

CBD apartment prices over the 12 months of 2020 were soft, with zero growth in Melbourne CBD at a median of $520,000, 0.9% growth in Sydney CBD to $875,000 and a fall of -5.1% in Brisbane CBD to $470,000, according to CoreLogic data. But things are changing in 2021. 

Over the first five months of the year, median CBD apartment values grew slightly in all three cities to $527,500 in Melbourne, $900,000 in Sydney and $490,000 in Brisbane. The recovery is underway.

Whilst the value buy available in the CBD is clear, many people don’t realise that the pandemic’s impact has extended beyond the CBDs to inner ring suburbs within a 10km radius. 

For example, the median apartment price in Lane Cove LGA on Sydney’s Lower North Shore is $785,000, down -8.6% on a year ago. In Botany Bay LGA, in Sydney’s southeast, the median is $805,000, down -4.2%. 

In Melbourne, the median apartment price in Boroondara LGA, in Melbourne’s eastern suburbs, is $760,000, down -1.9% over the year. In Stonnington LGA, in Melbourne’s inner southeast, the median is up by only 1.5% to $660,000.  

In Brisbane, the median apartment price in the suburb of Gaythorne in the city’s northwest is $375,000, down -8.2%. In Salisbury, in Brisbane’s southeast, the median is $369,000, down -6.9%. 

The East Coast capital cities will inevitably rise again. Sydney and Melbourne are established international cities and Brisbane will receive global attention as host of the 2032 Olympics.

Business will come back to the CBD, nightlife will resume and people will once again want to live in the inner city, just as they are now in the reopened U.S., U.K. and Europe.

Local buyers have a unique, time-limited opportunity to buy a great value inner city apartment now and then ride the wave of capital growth that will inevitably follow once we reopen to the world. 

To read more about the inner city value buy, download the McGrath Report 2022.

The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters. 

For more information including articles, checklists, guides and more visit McGrath’s Insights Centre.

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