The biggest property market in Australia has stalled for seven years and counting. While the calls keep coming that such a performance can't last much longer, the numbers have yet to show any major shift yet
Glancing at the latest statistics on this page and others, it's hard to see the evidence that Sydney has much to offer in capital growth. Prices have been stagnant, not just this year, but dating back to about 2003.
A turning point may be coming soon, however, say experts.
"Sydney is the first market that will take off," says Paul Wilson, director of We Find Houses.
All it takes, many believe, is a shot back of confidence. The fundamentals are already there, they say. Rental yields already are amongst the best in the country, second only to Darwin in April for units of the capital cities. An undersupply of housing will keep demand strong for years to come.
A Westpac report in May stated gross yields in Sydney could reach 5.9% this year, while the mortgage rate falls closer to or below 5%.
Especially on the lower to middle end, investors and buyers alike are starting to sense now may be as good a time as ever to make a purchase. Others still are holding off, but sense their moment is coming soon.
"There are a lot of buyers, and they are willing to buy at the prices we are seeing," says Liam O'Hara, Senior economist at Reality Economics. "The boost (to the first homebuyer grant) has been extended, and that's brought a lot of certainty. Now we're in the middle of the year, and people can start to weigh up if they can keep their jobs and make a purchase."
He compares the situation to nearing the top of a climb on a hill, with potential buyers starting to feel they can see more clearly what lies ahead and what is going on around them.
But while prices have been attractive up to a certain point, those properties in the wealthier market continue to stumble in New South Wales. Many are losing hundreds of thousands from the advertised price, as the owners become desperate. These high net worth owners often have lost large chunks of wealth in the global economic downturn, thus forcing some quick sells. O'Hara says few, if any investors are willing to pay top dollar for these homes, though, that were over inflated in the boom.
"People still aren't prepared to pay $1m for a property that would be bought 10 years ago for $400,000," he says.
Another concern is the unemployment rate - currently the highest in the country.
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