Some excellent news for homeowners, frightening news for first-time buyers: Sydney house prices have reached a staggering all time high according to a report released by Domain this morning.
The Domain Group House Price report revealved that house prices have soared by 8.4 percent over the last June quarter (the highest rate of growth since the late 1980s), reaching an average of $1,000,616. With the combination of the lowest interest rates since the 1960s, and an inordinate influx of foreign investment, Sydney has officially beaten London’s average house price, and is fast approaching New York’s.
RESCU property expert John McGrath believes that there’ll be a while before Sydney-siders will see a change in the market.
‘Sydney in particular has proven to be one of the most resilient property markets in the world with long term fundamentals that underpin the market.’ Says John McGrath.
‘As Sydney’s auction clearance rates are holding steady in the 80% plus range, one of the things helping the Sydney market along is the strengthening NSW economy and high levels of migration.
‘The boom will end at some point, but that doesn’t mean price growth will end, but rather continue in a more moderate fashion.’
With the current financial situation in Europe, this also comes as good news to Australian investors.
‘The current volatility in Greece and the Eurozone has brought volatility back into the sharemarket, and I suspect will continue to have a favourable impact on the demand for residential property.’
So what does this mean for buyers and sellers in Sydney? According to John McGrath, not as much as the media hype is implying.
‘As prices keep rising, so does the intensity of discussion around price bubbles and the apparent potential for collapse of property values in the Sydney market.’ Says John McGrath.
‘I believe that buyers and sellers need to ignore this commentary. Sydney has proven itself over and over again to be one of the most resilient property markets in the world.
‘Yes, it’s a bit unusual to have such a long stretch of significant price rises. But it doesn’t mean a calamity awaits us. A big part of the growth we’re experiencing today is simply catch-up after several years of little growth.’
The investment boom is not likely to dwindle any time soon either, according to John McGrath.
‘While the investors and upgraders have continued to dominate our markets along the eastern seaboard, the top end of the market is finally starting to see some good momentum. As our dollar continues on a downward trend, I anticipate increased interest from expat and offshore buyers as they benefit from a 25% currency reduction on what they were paying 18 months ago.’