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Home buyers are being urged to enter the Sydney market now with prices expected to surge further in the remainder of the year after better-than-expected gains at the start of the 2010 driven by explosive rises in the Inner West, Eastern Suburbs and Lower North Shore.
Henry Wilkinson, principal of Sydney-based buyers agent and property consultant Homesearch Solutions, says people should be buying now, rather than waiting. “We’re advising our clients to buy early this year rather than later,” he said. “We’re just seeing no sign of any change – unless there’s some world economic difficulty that comes from left of field. If fundamentals stay the way they are we’re expecting a very strong year in growth of greater than 10 per cent.”
According to REX data, Sydney’s median house price rose 5.63 per cent to $525,000 in the paste rolling quarter, while the Property Price Index, which factors in repeat sales, rose 0.85 per cent to $479,972. It has outstripped gains in other NSW cities, including Wollongong where median prices were up 3.7 per cent to $362,950 and Newcastle where prices gained 1.54 per cent to $330,000. Sydney has also outperformed other capitals such as Brisbane where median prices rose 1.32 per cent.
“What were considered bullish forecasts of ours six months ago have turned out to be on the light side,” said Harley Dale, chief economist at the Housing Industry Association (HIA). “Things are going even more strongly than we have forecast. On both fronts (activity and prices) it’s clear that, yes, we are in the midst of a housing recovery in Sydney.”
Sydney’s housing recovery follows years of underperformance – the median Sydney price fell as low as $440,000 in March 2009 – after the market was affected by a sluggish local economy and the global financial crisis. But a stabilization of the economy and stock market has restored confidence in the Sydney market.
Wilkinson said Sydney’s Inner West has been particularly strong, along with the Eastern Suburbs and Lower North Shore. The HIA’s Harley Dale says the question is now whether Sydney’s price gains are sustainable. “Will we be talking about this kind of recovery in 2011? I think we’re at the crossroads at the moment,” he said. “There’s enough momentum that 2010 will be a better year than 2009 was. The next two to three to four months of information on housing will give us an idea of whether we will see a sustained recovery. It’s touch and go at the moment.”
But Dale is optimistic that prices can keep rising. “Momentum and confidence are very important to the Sydney market – two things Sydney has been lacking since around 2003/2004,” he said. “There’s more confidence on the ground from the building community than there has been for some time. There certainly seems to be a recovery underway in home values which is very good for household confidence. What I sense from talking to people on the ground is that sentiment’s improved and that’s a vital first ingredient.”
According to REX, hot suburbs in Sydney include:
onthehouse.com.au offers property sales data for you to do your property research.
Based on information provided by and with the permission of the Western Australian Land Information Authority (2013) trading as Landgate.