Sydney professionals who can work remotely are buying up big in the Mountains.
The laid back, friendly lifestyle, climate, views and community facilities are all proving big drawcards for young buyers who can’t afford to break into the Sydney market. And price is a major factor for many new residents setting up house.
The upside has meant real estate agents expecting a COVID-19 collapse have been pleasantly surprised, the downside is the rental market is overheated and some locals are struggling to get a foothold.
Belle Property agent Catriona Swan told local media she noticed at the start of COVID-19 an influx of Sydneysiders moving or renting in the area. In March - and for the first time ever - their Leura real estate agency was asked to lease furnished Airbnb properties for "the stability of a permanent rental" for their owners.
"The market is driving it," she said. "It's sales and rentals supply and demand. There's not enough properties and a high level of people wanting to get out of apartments and congested living."
Ms Swan said buyers were searching for options in the "two hour ring" from Sydney and some other capital cities. She said compared to 2019 when it was a 60-40% split between Sydney and local buyers, now it is a 75 to 25% split - three quarters of buyers are from Sydney.
“It used to be retirees coming here but now it’s also families and young professional couples all looking for a better quality of life and to get more for their money,” she says.
“Western Sydney now has so much more employment, the transport infrastructure is so much better and technology means people are much more flexible in the way they work, and might work from home a couple of days a week now.
“We’re seeing people coming from semis in the inner west and apartments in the eastern suburbs and lower north shore and getting a three to four-bedroom house on a large block for the same money,” Blue Mountains has also seen the volume of sales up by 14%
Ms Swan recently sold 8 Railway Parade - a two-bedroom character cottage near the station in Wentworth Falls to a young Sydney IT couple for $890,000.
To get something for under a million dollars with a view to the city and 1000sqm of land, ticked all their boxes.
Chief economist at AMP Capital Shane Oliver said the inner city was out of fashion and the new appetite for living further from work would revolutionise the market.
"If you can live in the Blue Mountains and only have to come into the city one or two days a week or not at all, then that's going to revolutionise the Australian property market.”
Brendan Coates from the Grattan Institute said it was unlikely Sydney would experience property price bubbles in the near future as "people have been voting with their feet" and moving out of inner-city areas to the suburbs or regional centres.
Even before COVID-19 people were moving out and travelling to the city for work but now most people don't need to go to the city provoking interest in the Blue Mountains.
The number of vacant rental properties in the Blue Mountains hit ten-year lows in August dropping to just 49 vacancies or 0.7%.
There were 1448 vacant rentals in the CBD in August down from May when 1796 rental homes sat empty and pushed vacancy rates to 15-year record highs of 15%.
Katoomba once drew honeymooners in their thousands, now is proving particularly attractive for young people moving there permanently, driving prices up 22% in the past year and 87% in the last five, but still with a median of just $610,000.
The lower reaches of the mountains, where most commuters might find the commuting easier, is also showing strong price growth.
Blaxland, with a median of $750,000, has risen 72% in the past five years and Springwood, 60% during the same period to $680,000.
Scenic Wentworth Falls has a median price of $715,000, which sits above the overall house median of $680,250 in the Blue Mountains region.
