The head of Australia’s biggest residential property developer has declared Sydney’s current growth cycle is nearing its end.
Mirvac Group chief executive Susan Lloyd-Hurwitz believes that residential sales levels in Sydney are set to drop off, which will coincide with a levelling out of Sydney’s current capital growth rate.
"It does seem that the Sydney market is close to the point at which the strong upward trajectory will end," Lloyd-Hurwitz said while speaking at a briefing for Mirvac’s financial results.
"Previous cycles would suggest that activity, i.e. volume of sales, will moderate for a year or two by 15%, but importantly we don't believe this will lead to price falls rather we expect price growth to moderate away from the double-digit growth rate that it has been experiencing."
Earlier this week the Property Council of Australia expressed concerns about how the ongoing push by the Australian Prudential Regulation Authority to slow down lending to investors was affecting the construction of new homes
and Lloyd-Hurwitz expressed a similar concern.
“We do welcome any efforts to strengthen market stability and avoid the risk of a sharp downturn but blunt measures such as stricter lending standards for investors can in some circumstances be a cause for concern.
“We do need to be careful that national macro prudential measures don't weaken the overall construction market which is playing a critical role in the economy's transition away from the resources construction phase.”
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