Blue Mountains: Sydney buyers rush to Mountains during the pandemic

Tech-based urban dwellers have fled Sydney and are making the Blue Mountains their home with three quarters of house sales this year from Sydney buyers.

The coronavirus has brought a new customer to the sales and rental real estate market in the Mountains - young urban professionals who can work at home and don't want to be doing that in a tiny Sydney flat.

The upside has meant real estate agents expecting a corona 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 said she noticed at the start of COVID 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 per cent split between Sydney and local buyers, now it is a 75 to 25 per cent split - three quarters of buyers are from Sydney.

This year to date, Blue Mountains has also seen the volume of sales up by 14 per cent, she said.

Ms Swan recently sold 8 Railway Parade, a two bedroom character cottage near the station in Wentworth Falls, to a young Sydney couple for $890,000.

IT professionals, Niki Banerjee and ShruthiRao left their Sydney rental and bought in the Mountains on a "random" weekend after looking at properties up and down the coast for three months. To get something for under a million dollars with a view to the city and 1000 square metres of land (when homes in Clovelly where they were living were selling for $5.5 million for 300 square metres) ticked all their boxes.

"COVID was hard from a mental health perspective," said Mr Banerjee. "We took a weekend away [up here]". "It was so random," added Ms Rao.

They have friends booked in to stay every weekend for the next few months and expect only to need to work out of Sydney once a week.

"We are lucky our industry supports working from home that much," he said.

They are enjoying the fresh air and kindness of strangers.

"Our neighbour brought in a cake the day after we moved in," Mr Banerjee said

Belle Property has more than 30 pre-registered inspections booked for a character cottage in Katoomba's Ada Street, renting for $650 a week.Usually at any one time there are about 110-120 homes to rent in the Mountains - now there are only 50, said property manager Alex Thomson.

"We desperately need more listings," he said.

McGrath property manager Debbie Presland said: "As soon as the pandemic started we noticed the influx of people moving up because they can work from home." They have no properties currently available to rent - a shortage Mountains-wide seen on real estate website platforms. But she said popularity always "depended upon the property".

Eliza Owen, Head of Research Australia at CoreLogic, said while parts of Australia's property sector have grappled with the impacts of COVID-19, prices in some regions have flourished. There had been a huge spike in interest from tenants in regional and coastal areas around Australia, while demand in city regions had dwindled.

The highest rental value increases were across Blue Mountains houses, rising 3.3 per cent between March and August.

She said "one explanation may be that outer-city suburbs have been less exposed to the factors driving declines in demand, such as overseas migration".

"Anecdotal reports assert that a drawcard for outer-city suburbs are relatively cheap rents, and low density along with remote working lessening the hurdle of travel times from areas located further from the largest employment nodes. This may have increased rental prices through higher demand," she said.