Northern Beaches

Growth potential: This five-bedroom home at 961 Barrenjoey Road, Palm Beach, sold for $7 million last September through LJ Hooker Palm Beach.

The hammers and saws are getting a workout on the northern beaches as buying and remodelling older properties takes off on the back of a much-welcome recovery in sales.

"There is a lot of renovating," says Century 21 Dee Why principal Brett Read. "There's not so much knockdown and rebuilding - most buyers are stretched just to buy a property and most do it with a view to renovate slowly over time as they can afford it."

961 Barrenjoey Road, Palm Beach.

A shortage of properties under $1 million has agents on the northern beaches wishing for more supply.

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"Anything under $1 million is attracting a lot of attention," says Read. "There are just not enough to satisfy the buyer demand. From Manly to Palm Beach that's really the case."

David Mackay, principal of LJ Hooker Avalon, agrees. "The bottom end of the market up to around that $1.2 million mark is very, very hot," he says. Buyers who fall in love with a property in that price range might need to move fast. "What we're seeing unfortunately is gazumping," says Mackay. And there are also many buyers wanting to seal a deal before auction. "In previous years, we just haven't experienced that," says Mackay.

First homebuyers on the northern beaches are thin on the ground. Century 21's Read says directing first homebuyer grants to new property has "really caused this".

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Renovators get busy, pushing up prices