Only a year ago investors were still ploughing money into Sydney’s multiplying property developments, defying experts’ advice about changing market conditions ahead. Sydney, the economic powerhouse of the Australian economy, had grown accustomed to witnessing double-digit prices growth across the city. The construction cranes which had dotted Sydney’s skyline stood as a testament to investors’ exuberance for property investing in the harbor city. A year on, however, and things have changed measurably.
CHANGES IN SYDNEY’S PROPERTY MARKET OVER THE LAST YEAR
Property development in the Sydney has wound down a little in the last 12 months, as the city’s property sector takes a breather from the frenetic growth of the last few years. By the time the September Quarter 2017 came around the number of new private dwellings construction had fallen by 10%. It is large public works projects like the airport, CBD trams, and big road projects that are helping the construction industry stay afloat while private development shrinks.
The NSW government’s public works program is expected to exceed $70 billion over the next four years as rail, road, hospitals, and school projects aim to give NSW the infrastructure it needs as the state’s population continues to swell. The timing could not be better – it is working to keep NSW in prime position as the economic leader of the nation. Economic growth rates for the state remain almost double that of the Australian average, ensuring employment remains strong even as calm descends on the property sector.
NSW GOVERNMENT SUPPORTING THE STATE’S ECONOMY
The public works pump-priming of the economy has not been able to stop the changes from unraveling the Sydney property market. With boom-times gone, the Sydney real estate market had begun to slide toward the end of last year, with December 2017 registering a 0.9% decrease in property prices. This only accelerated, and in the year to June 2018 Sydney experienced a 4.5% decline in housing prices. In Sydney’s inner west the picture is even less rosy. Houses in this area saw prices drop by over 11%.
THE CITY SLIDES AS THE REGIONALS RISE
Interstate property investors may assume NSW property is a write-off. This thinking is a bit too narrow and pessimistic. There are still great investment options available if you think outside the box. Or rather, outside of the Sydney basin which is seeing some of the fastest appreciating property prices in the country? While city property prices slide regional prices are on the rise!
Newcastle, the Hunter Valley, and Lake Macquarie have seen some of the fastest rising property prices in the country. According to data from CoreLogic, Newcastle and Lake Macquarie saw property prices surge by 7.1% over the past year. Next door, the Hunter Valley area witnessed prices escalate by 5.9%.
CITY EXODUS DRIVING REGIONAL’S RISE
It’s not hard to see why the regional areas have become so popular. Even though Sydney’s market saw the median house price decline from $1,198,456 to $1,144,217, regional median house prices were $364,706. The price differential is driving an exodus from capital cities.
Regions like Newcastle, Lake Macquarie, and the Hunter make particularly good choices as it is still possible to commute to Sydney’s CBD for work. But, with prices growing so firmly, these regions also make attractive investments for real estate investors.
The key to find attractive property investments is to ensure you have the best information about the market you can find. That’s why it is often best to seek advice from specialist property advisers like Vision Property & Finance’s Matt Ivers. Matt keeps up-to-date with market movements and has a keen insight into what drives the property market. He knows where it is today, as well as where it is heading tomorrow.
Give Vision Property & Finance a call today on 1800 004 663 and speak to one of our property experts.