With the market taking a breather over the usual quiet winter period, and also mixed with an election, I am sure many real estate agents are well rested and gearing up for a busy Spring. House prices for the June quarter continued growing but at a slower rate, and auction clearance rates have been hovering between 60 and 70 percent.
Since the beginning of 2009 the Sydney housing market has turned the corner. Between January 2009 and May 2010 Sydney house values ( Houses and units combined) have increased by 17.8%. This is the highest rate of growth since the boom in 2003.
The median price of a Sydney house now is $602,250.00 and that is 20% higher than the national average.
NSW over the 2009 calendar year accounted for 26.8% of the Nations overall growth and that's higher than any other state, and the largest share of population growth since 2002. Sydney is still the pick of all states for migrants and figures have shown that more people are deciding to stay in Sydney rather than leave to other states.
Some interesting data is that homes in Sydney are still selling faster than the national average- just 28 days for houses and 25 days for units, which suggests that demand continues to outweigh supply.
In my 20 years of real estate there has always been a supply problem and it's not getting better and probably never will. When developers enter into a project it is not emotional, just purely numerical and the difficulty with this is that the people selling the land to the developers want too much, and the figures just don't stack up at the end of the day for the developer, or the bank that's lending the money.
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| SYDNEY | NATIONAL |
| Median price, houses: | $602,250 | $500,000 |
| Median price, units: | $447,000 | $419,000 |
| Median price, all dwellings: | $517,250 | $468,000 |
| Capital gains, houses (12 months): | 11.4% | 12.2% |
| Capital gains (units): | 12.5% | 11.6% |
| Capital gains, all dwellings (12 months): | 11.3% | 12.1% |
| Average time on market, houses: | 28 days | 35 days |
| Average time on market, units: | 25 days | 32 days |
| Average vendor discount, houses: | 5.4% | 5.2% |
| Average vendor discount, units: | 4.8% | 6.5% |
| Average weekly rent, houses: | $514/wk (up 0.7% year on year) | $429/wk |
| Average weekly rent, units: | $487/wk (up 2% year on year) | $420/wk |
| Average gross rental yields, houses: | 4.1% | 4.0% |
| Average gross yields, units: | 5.1% | 4.8% |
*Source: RPData
My property predictions moving forward into Spring will all be based on what stock levels arrive over the next 8 weeks, and unfortunately at present agents are reporting a very low level on the horizon. If that is the case there is no doubt that the up to $2.5 Million range in houses and up to $1.5 Million in units will see a strong capital gain by year end.
My pick for investment properties would be units in the lower north shore of Sydney being Neutral Bay, Cremorne and Mosman in the price ranges of $550,000 to $750,000.
Vacancy rates are still around 2 percent in this area of Sydney but I feel that they are going to drop lower over the next 6 months, and rents in general are going to skyrocket over the next 3 years.
PK's HOT TIP:
When bidding at auction make sure your bids are delivered quick and in the amounts that you choose, not what the
auctioneer is telling you to do.
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