With spring in the air, sentiment in the Sydney property market has improved.
The Westpac-Melbourne Institute Consumer Sentiment Index for August notes a 9.1% jump as oil prices fell and interest rate cuts became more certain. This confidence is likely to improve if the RBA makes successive rate cuts, thus encouraging buyers back to the market.
Analyst forecasts a further 2 – 3 rate cuts throughout 2009.
Increasing interest rates, petrol and food prices have contributed to a deteriorating housing affordability problem in Sydney, which has caused more people to delay purchasing in favour of renting.
Extra demand for rental properties along with increased international immigration (catering to a skills shortage) and a reduction in the number of new dwellings being built have caused a rental property shortage.
With spring in the air, sentiment in the Sydney property market has improved.
The Westpac-Melbourne Institute Consumer Sentiment Index for August notes a 9.1% jump as oil prices fell and interest rate cuts became more certain. This confidence is likely to improve if the RBA makes successive rate cuts, thus encouraging buyers back to the market.
Analyst forecasts a further 2 – 3 rate cuts throughout 2009.
Increasing interest rates, petrol and food prices have contributed to a deteriorating housing affordability problem in Sydney, which has caused more people to delay purchasing in favour of renting.
Extra demand for rental properties along with increased international immigration (catering to a skills shortage) and a reduction in the number of new dwellings being built have caused a rental property shortage.
Sydney rents increased by approximately 10% over the past 12 months. Median rental yields are forecast to grow to 5.2% by the end of 2009.
City and Eastern Suburbs
Despite generally weaker market sentiment we have seen some record high-end sales over the past year, with “Routalla” in Wunulla Rd, Point Piper selling for $28.5m, “Tahiti” in Vaucluse Rd, sold for $29m and “Craig-Y-Mor” selling for $32.4m in Wolseley, Point Piper.
Overall property prices trended up over the past 12 months with house prices gaining 3.2% and units 7.7%.
As property prices in the more expensive suburbs increase, a greater number of people in these areas are renting.
Inner West
The inner west has been Sydney’s most buoyant property market according to Australian Property Monitors. Units increased in value by 9.7% and houses 7.1% over the past 12 months.
The apartment market in Ultimo and Pyrmont are now achieving 6%+ rental returns.
Buyers are capitalizing on Sydney’s last affordable city fringe properties in the inner west.
West
Rents have soared in Sydney’s Western suburbs increasing by 19% for units and 18% for houses.
With an increase in forced sales and repossessions there are many more people looking for rental properties.
Despite rising rents 11.5% was wiped off the value of units. Houses have grown by 2.2%, which is a step back in the right direction.
South
With some of Sydney’s most affordable waterfront properties it is no surprise that the St George and Sutherland Shire have enjoyed strong property markets.
First home buyers are no longer considering suburbs such as Picnic Point, Lugarno and Oakley.
House prices are growth more than any other Sydney region with 12.1% over the past 12 months. The average rent in these areas has increased by 20% over the same period.
Cantebury
House property prices in Cantebury-Bankstown region have plummeted 14.4% over the past year, with unit values dropping 6.6% over the last financial year.
There is 50% more unsold properties on the market than at the same time last year, with few buyers around. This is resulting in heavy discounting by vendors to entice buyers.
Astute buyers are picking up absolute bargains. The key is to be well researched and be clever in negotiation
South West
The number of weekend auctions held in the south west has more than doubled in the past few years.
This is due to the number of mortgagee in possession.
Forced sales and distressed vendors have caused house prices to plummet by 11.2% over the past year.
Petrol prices are interest rates are biting hard in the South West and most expect apartment’s values to fall further.
North
The leafy North Shore and Beaches had another strong year of house price growth with 9.5% with units gaining 1.9%.
The residents of these areas seemed some what sheltered from the effects of rising interest rates, maybe as they seem to be passing on the costs to their tenants. It is about 20% more expensive to rent a premises in the Sydney’s north.
Expect some stabilization as finance sector bonus’ dry up and businesses feel the effects of a weaker retail sector.
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