October 2015 – Directions for Sydney and Brisbane Property Markets
Date Posted: Sep, 2015
By Rich Harvey, Managing Director propertybuyer
Sydney’s median house price is now $1m while Brisbane’s median is just over $500k. What will be the growth drivers in each of these cities and what are the ongoing risks and opportunities in each market? How will the spring market play out for the rest of the year?
In this edition we look at:
- Directions for Sydney and Brisbane
- Canberra Seminar with Trilogy Finance – Wed 21 Oct
- REINSW Awards for Excellence 2015 – Winner
- Tickets to Sydney Property Buyer Expo 30 Oct – 1 Nov
1. Directions for Sydney and Brisbane Property Markets
As we enter the mid spring selling season we expect to see further moderation in price growth in Sydney – as some of the heat has gone out of the market. Calls that Sydney has already peaked are premature as we are still seeing healthy auction clearance rates and continuing demand in most areas. Brisbane activity is also set to ramp up with attractive prices and higher yields.
Low interest rates are still driving strong demand for home buyers seeking to upgrade and investors looking to expand their portfolio. Home buyers seem to be comfortable taking on larger debts and the banks are ramping up incentives to get a larger slice of the mortgage market. Investors on the other hand are being slowed up by restrictions on lending by APRA – but what many investors don’t know, is that there are many other lenders that sit outside APRA guidelines that can lend money for property investment. My advice is to seek out a savvy mortgage broker that can do the running around for you and find the best loan and finance structure for your individual situation.
Last weekend saw over 1,020 properties put up for auction in Sydney – otherwise known as “Super Saturday” – and the auction clearance rate was 71%. This shows that despite increased listing numbers the market is still resilient. However, we are also seeing a reduced level of intensity amongst buyers. The fear of missing out is subsiding. We would regularly see 50 groups to apartments just listed in the first week. Now the figures are down to around 15 to 20 groups. During the height of the boom period, we saw auction clearance rates around 80% – 90%. In the coming months we should expect to see clearances in the mid to high 60% range depending on how willing vendors are to meet the market.
RP Data Core Logic report that total listings are up by about 7.5% pa for the spring period – yet we still hear agents bemoaning the lack of listings available. Days on market in Sydney is still very strong at just 26 days for houses and 25 days for units. Comparatively, Brisbane is showing 60 days on market for houses and 66 days for units.
One of the key reasons I believe that Sydney will still continue to perform strongly for the next decade is continuing undersupply. BIS Shrapnel is forecasting that it will take more than five years to clear what it estimates is a 50,000-strong shortage of homes.
BIS Shrapnel associate director Dr Kim Hawtrey expects Sydney to be undersupplied until at least 2020 and for the Sydney market to be healthy for the next five to seven years.
“You wouldn’t want to be in Melbourne or Perth or Adelaide because all of those are going to see declines in building activity over the next three years.”
“On the other hand, New South Wales is still going to grow and Queensland is going to do pretty well too. Sydney might be the one exception where the undersupply exists. The New South Wales economy is on the up and so we’ll probably still see some better price performances in Sydney.”
So have you missed the boat with Sydney? Absolutely not. Sydney is a very diverse market with many new pockets of value that our research and due diligence is uncovering. You don’t need a million dollars to access these areas – but you will need between $400k to $700k to get into future growth areas that include:
- South West Growth Centre and along the South-West rail link extension
- North West Growth Centre around the Marsden area. Vineyard, Riverstone East and Marsden Park North are currently undergoing planning and will be rezoned into land for residential housing
- Broader Western Sydney Employment Area (in between Badgery’s Creek Airport and intersection of M4 and M7.
Sydney has experienced very solid growth over the last couple of years, which has compressed yields to all-time lows. It is harder to ‘flip’ properties for a profit because you can’t rely on market growth to carry you if you spend more than you expect to or you don’t get the sale price you expect to because the market has slowed down.
Looking ahead for Brisbane, we expect there to be steady growth due to ongoing population growth, infrastructure development and increasing difference in median prices in comparison to other capital cities. According to the most recent NAB survey, rental yields for both houses and apartments are higher in Brisbane compared to the national average and yet the price to income ratio remains lower.
We are regularly sourcing established houses in the Brisbane market in the $300k to $400k range and returning around 6% yield. However, be careful of some inner city apartment locations where there is potential for oversupply.
Call our friendly team today on +61 2 9975 3311 or email your wishlist to discuss your requirements to give you the edge in this competitive market and put you at the front of the property buying queue.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia’s most awarded Buyers’ Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.
2. Seminar: What’s REALLY Happening in the 2015 Sydney Property Market
“The Property Investor’s Guide to Sydney”
Featuring Rich Harvey (presented by Trilogy Funding)
Date: 6.00pm, Wednesday 21st October 201
Location: East Hotel (69 Canberra Avenue, Kingston ACT)
Click HERE to Reserve Your Spot Today
What You’ll Learn On The Night
During this session, you’ll discover up-to-date insights on the Sydney investment landscape, plus a number of tried-and-tested techniques that will enable you to grow your equity and your cashflow.
In the workshop you’ll discover:
- Which way Sydney housing prices will head in 2016
- Why the experts often get it wrong and how you can cut through the hyperbole
- How to identify and avoid suburbs where prices may fall
- Where you can find areas with imminent price growth
- Equity growth techniques Rich is using with great success
- How to research, find, finance and secure a top performing investment property in Sydney
- Subdivision, renos, dual living, established, off-plan – what’s working right now
- Creating the right finance strategy for equity release and controlling valuers
- How to finance multiple property purchases
PLUS, there will also be time for Q&A with Rich at the end of the session – so you can have your own questions answered.
What To Do Next…
To secure your seat for the workshop, simply Click HERE to Register.
Please NOTE: I expect this FREE event will “book out”. Room capacity at East Hotel is only 80 people. To make sure everyone gets a seat, our ticketing system will only let 80 people RSVP. After that, sorry, we cannot take any more bookings.
Click HERE to Reserve Your Spot Today
3. REINSW Awards for Excellence 2015
I was very humbled and excited to receive two awards at the Real Estate Institute of NSW (REINSW) 2015 Award for Excellence. I was presented with the Buyers’ Agent Award for Excellence and the highest accolade of the night – the Woodrow Weight Award.
The award is judged by three independent judges who assess our quality of service to clients, accuracy of appraisals, network, leadership skills and professional development.
I am so proud of my team of buyers’ agents and support staff for their continued dedication to customer service, client loyalty and standing up for the rights of buyers.
The Woodrow Weight Award recognises outstanding contribution to real estate agency practice and the REINSW.
This is the first time this award has been presented to a Buyers’ Agent and helps raise the awareness of exclusive buyers’ agents that solely represent the buyer.
4. Tickets to Sydney Property Buyer Expo 30 Oct – 1 Nov
As President of the Real Estate Buyers Agent Association (REBAA) I will be a keynote speaker at the Sydney Property Buyer Expo from Friday 30 Oct to Sunday 1 November.
Sat 31 Oct: 11am
Sun 1 Nov: 12pm (masterclass)
Topic: The Buyers’ Agent: Your Secret Weapon to find the right property at the right price, everytime.
If you would like any free tickets (saving $20/person) you can use this link and entering the promo code: “rebaapbe” (all lower case).