The Sydney
property market really hit its straps in 2009, with
an overall annual growth of 11.9 per cent coming off
a leading national base. The predictions of a slowdown
in growth, or even a fall in prices, proved wide of
the market, and Sydney has maintained its cracking
pace through the first quarter of 2010.
Investors will be alert to the fact that with a median
house price of $600,000*, and units at $430,000, Sydney
property is leading the country, and providing a platform
for meaningful dollar gains as the anticipated growth
trends continue. Analysts are predicting Sydney property
prices will increase by between 8 and 10 per cent in
2010, which would see the median house price increase
to over $650,000.
The NSW economy has been showing signs of increased
strength, and employment levels have increased to be
a closer reflection of national figures. Housing construction
has also picked up after a very weak 2009, that in
fact served to drag down the national picture in terms
of housing supply. With continued population growth
and a serious shortfall of new accommodation relative
to demand, rentals are close to $500 a week for houses,
with extremely low vacancy rates of around 1.3 per
cent. Property investors will appreciate that this
equates to virtually zero availability, given that
there are always properties vacant as people move,
refurbish and renovate their properties.
In terms on investment property, Sydney is typical
of the national trend where first home buyers have
retreated as the government stimulus has been wound
back and in the face of increase rate rises. Investors
have stepped forward in this environment, using growth
in the equity of their homes to enable further property
investment.
Sydney investment property that is positioned in the
$350,000 to $450,000 bracket will be subject to strong
demand, providing upward pressure for continued capital
growth at around 8 to 10 per cent, and with very sound
rental prospects. This price band brings new property
within reach of discriminating mainstream renters.
The continued population growth rate into Sydney in
particular amidst the decline in housing construction
has led to an extremely competitive market for renters.
While it is a tough market for those trying to lease
a property, property investors in the right affordability
band certainly won’t be complaining!
*Data source in this posting: RP Data and Rismark International.
|
