Sydney sees further price growth in November, but at slower pace
December 4, 2013 / Written by Thirst Creative
Figures from RP Data and Rismark seem to indicate that price gains in capital cities across Australia are starting to slow.
‘‘It looks like we may have hit peak growth," said Cameron Kusher, research analyst for RP Data.
"If you look at the last two growth cycles in 2007 and 2009, they peaked around 18 or 19 months in. We’re now at 19 months in this latest phase and growth is starting to flatten."
Mr Kusher went on to say that while low interest rates will continue to spur on demand, it is unlikely to reach the same levels as the last few months.
However, it's important to keep in mind that the activity of the past few months has pushed home values to new highs, particularly in Sydney and surrounding suburbs.
From Newport in the north to Rose Bay in the east, investors who decided to buy investment property in Sydney have seen huge returns due to price growth.
And according to some industry observers, prices may have not even reached their peak.
SQM Research's Louis Christopher told The Sydney Morning Herald that it's too soon to make any calls regarding price peaks, pointing out that seasonality and a pocket of excess stock could have more to do with reduced price growth.
Slower growth not necessarily a bad thing
While high price growth is typically a good thing for investors, it runs the risk of forcing regular home buyers out of the market.
This can hamper demand and lead to a prolonged decline in values.
Meanwhile, slower growth is more sustainable, and could be good news for investors in the long run.
Additionally, prospective buyers may find it easier to obtain finance for a property in the Sydney area.
However, demand remains high, which makes using a qualified buyers agent in Sydney a good idea for those looking to take advantage of current market conditions.