Residex has just released its latest quarterly report on the NSW property market. The key points are:
- Most markets around Australia experienced only modest growth during the year. The notable exceptions were Sydney and Melbourne where annual growth in dwelling prices were 18.36% and 13% respectively.
- Historically, the Melbourne and Brisbane markets lag Sydney. Growth in the latter two markets may be impacted by global economic factors and the RBA/APRA crackdown on speculative buying initiated last year.
- 40% of national property sales were recorded in metropolitan Sydney and Melbourne alone. Our two largest cities dominate the market and regulator policy.
- While global economic growth is stagnating, the US and Indian economies remain strong, mainly due to strong domestic consumption. Meanwhile China reported its lowest annual GDP growth in 25 years. Economic performance across Europe is mixed with unemployment rate as low as 4% in Germany and above 20% in Greece and Spain.
- The NSW economy is performing strongly - mainly generated by the real estate sector! Growth in real estate services and construction accounted for 51% of growth in gross state product (GSP).
- Capital growth in the Sydney housing market is now starting to retreat after an upswing which lasted almost 3 years. Sales volumes are now declining and there has been a slight decline in prices. It is likely that there will be a fall in values as the market cools but this is not likely to match the increases during the upswing meaning that dwelling prices will remain high in the long term.
- The Sydney median house value is $1,065,000 and median unit value is $688,500. Residex is predicting growth of 1% pa in house prices and 0%pa in unit prices across the Sydney market over the next 5 years.
A copy of the full Residex report can be found here