THE SYDNEY PROPERTY MARKET -
WHAT'S HAPPENING NOW

Peter Kelaher

Since the beginning of this year the Sydney property market has shown some interesting signs of backing off in some areas, but remains very strong in others. There is no doubt that we are now in what I call the great divide, a two track market. Mortgage holders in the lower income brackets are feeling the pain of high interest rates and little capital gain on their property investment, while blue ribbon property owners are experiencing good capital growth and excellent rental yields. There is no doubt that the share market has put the jitters through both the economy and the high nett worth earners, but the reason property in these areas is holding its own in a turbulent market is that there is simply no stock. Remember the old saying it is all about supply and demand and at present the demand is way higher than the supply. In 2007 the more established areas like the Lower North Shore, Eastern suburbs, parts of the upper North Shore and Northern Beaches all saw capital growth between 10 and 15%. Of late we have seen the property investor migrate back to Sydney in large numbers purchasing units from $450,000 to $1.2 Million and achieving rental yields between 3.8% and 4.5% with a possible 10% minimum capital gain for 2008. Property Prediction With both Melbourne and Queensland achieving very fast growth within a short period of time and now on the descent, Sydney is no doubt ready for the picking for investors wanting to get into some of the blue ribbon areas at great prices. With rents predicted to move between 15 and 25% again this year and vacancy rates at a 33 year low, it won’t be long until we see 5 % yields again. Blue ribbon stock, that is the great family home on the North Shore, Eastern Suburbs, Inner West, and parts of the Northern Beaches in Sydney priced between $1million to $5million will move approximately 15% this year. Other properties in these areas that are second rate stock, on main roads, or don’t have certain features that suit a larger target market, I believe will move only between 8 and 10% this year. I think there will be some bargains to be had in the $5million plus range but don’t hold your breath, because 11 out of 12 properties reported sold in 2007 over $11 Million did not have a mortgage attached to them. With a volatile share market and interest rates peaked, I do believe this is a good time to pick up a bargain before interest rates level off or go down, which will stimulate the property market even more. Oh by the way you can now borrow money in your super fund to purchase property, please call us at PK Property Search and Negotiators for more information.

For a full list of other articles by Peter Kelaher, Managing Director of PK Property Search & Negotiators Pty Ltd please click here Home Buyers advice

Press Releases

Buyer's Agent Beware Checklist