Prosper Group, the leading Sydney Buyers Agent snapshots the Sydney property market and identifies buying opportunities.
Sydney property market and outlook:
NSW population increased by 72,000 people in 2007 (Sydney accounts for around 63% of this). Population growth was driven by international immigration (55,000), partly in response to the labour skills shortage.
New dwelling approvals totaled 30,500 in 2007, falling short of the 43,000 new dwellings required to house the growing population. The Sydney housing market continues to be undersupplied.
The vacancy rate in Sydney is 1.4%, placing more pressure on rents to rise in 2008.
Average rents for a 2 bedroom unit Sydney rents increased by 9.7% in 2007 and could rise by another 10% in 2008, which would take the average yield for 2 bedroom unit to 5.4%.
Prosper Group, the leading Sydney Buyers Agent snapshots the Sydney property market and identifies buying opportunities.
Sydney property market and outlook:
NSW population increased by 72,000 people in 2007 (Sydney accounts for around 63% of this). Population growth was driven by international immigration (55,000), partly in response to the labour skills shortage.
New dwelling approvals totaled 30,500 in 2007, falling short of the 43,000 new dwellings required to house the growing population. The Sydney housing market continues to be undersupplied.
The vacancy rate in Sydney is 1.4%, placing more pressure on rents to rise in 2008.
Average rents for a 2 bedroom unit Sydney rents increased by 9.7% in 2007 and could rise by another 10% in 2008, which would take the average yield for 2 bedroom unit to 5.4%.
Rising interest rates and lower affordability are generally likely to hinder the chances of strong demand or price growth recovery during 2008, especially in the mortgage belt areas. The average Sydney household now spend 38% of their gross income (close to 50% of their net income) on mortgage payments.
Sydney is currently a two speed property market with the inner city and beachside suburbs continuing to perform well as demand for dwellings outstrips supply and generally better affordability (lower level of debt to income ratio). This is in contrast to the outer west and some regional areas that are experiencing severe mortgage stress and bankruptcy’s are at record levels.
Sydney’s annual median price growth to September 2007 was 3.4 % compared against the long term average of around 8.4%. To name a few of the standout performers over the last 12 months; Bronte units median price increased 15% (from April 07 – Apr 08), Petersham units 15%, Surry Hills units 16% increase, Manly units 14% increase and Maroubra units 9% increase.
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Opportunities:
Sydney buyers agent, Prosper Group advise that when considering property investment opportunities in this market, investors should still adhere to the fundamental criteria of property selection. The property should; be well located and have good position, have some scarcity value (not in high rise apartment blocks) and also have some opportunity to add some value to the property or increase the yield.
Motivated vendors who have high levels of debt are currently discounting stock to off load it and some properties are being sold up to 10% - 15% below previous valuations.
Opportunities exist for investors to buy well and lock in equity as well as cash in on rising rental yields.
Investors should show caution before buying in the western suburbs of Sydney as it may be some time before this area recovers.
Opportunities exist for homebuyers looking to enter the property market as properties may be bought below replacement value. Many areas are discounting at present, so it may be a good time to buy and stop paying increasing rents.
Being a Sydney buyers agent we are frequently coming accross motivated vendors and as such are continuing to secure great deals for our clients.
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To view property buyers agent services click here – Sydney Buyers Agent or call us on 1300 664373.
