Why you should buy property in Sydney’s booming market
If you are anxious about buying property in Sydney then it’s time to think again. Sydney may well be showing signs that it is still booming with increasingly high property prices, but it’s not going to slow down any time soon.
There is a growing concern that Sydney is overpriced to buy property, with the median property price in Sydney now sitting at $690,000, compared to the likes of Melbourne ($518,000) and Brisbane ($445,200). However; even though property prices have dramatically increased over the past two years, and we have seen a 15% growth rate per year, there is still time to capitalise on this growth before it slows down.
The first quarter of 2015 is still seeing good growth with property prices ever increasing combined with high auction rates. According to CoreLogic RP Data, dwelling values in Sydney rose by 3 per cent for March, 5.8 per cent over the quarter and 13.9 per cent over the year. Sydney also had a clearance rate of 88.3 per cent (week ending 19 April 2015) which is the strongest clearance rate for Sydney on record where 950 auctions took place.
If you are holding on to the hope that property prices will come down soon and are playing the waiting game, then you are more than likely to end up missing out on potential capital gains. You may save a few bucks by waiting for a fall in property prices, but you have missed out on the potential gains that come from buying today.
The important thing to remember is, if you have the deposit ready for a property, then now is the right time to buy, even if it is within the boom phase of the cycle. Ideally, property should be seen as a long term investment and should be held onto for at least ten years. Properties tend to double in value over ten years so the sooner you buy, the sooner your property can grow in value.
4 reasons for Sydney’s continued Boom 1) Population Growth
One of the main reasons for these growing property prices is because of population growth. The population in NSW is constantly growing and is expected to reach 5 million by mid 2016 according to the ABS. This in turn is adding pressure to the housing market and creating more demand for property where 4.3 million new households are projected across Australia by 2036 (ABS).
2) Number One Economy
NSW has also been ranked as the nation’s best performing state economy according to the State of the States report by CommSec which the housing market, increased retail spending and population growth have all helped with.
3) Overseas Investors
Sydney is attracting a lot of attention from overseas foreign investors who in turn are pushing up Sydney property prices.
4) Low Interest Rates
Australia is expecting a further interest rates cut come May. Another rates cut will give an immediate boost to property prices as demand continues to grow and will make mortgage repayments much more affordable.
For now, Sydney remains a good place to own property and investors and home buyers should still consider buying property in Sydney with house prices expected to rise during the course of 2015.
Published on 28th of April 2015 by Marty Stanowich