The Sydney property market could see the rich getting richer in 2016.
According to the head of a Sydney-based property research firm, it’s likely to be the harbour city’s more affluent suburbs that experience the best rates of capital growth over the next year.
Louis Christopher, head of SQM Research, believes Sydney’s Eastern Suburbs will be the city’s strongest performing region come 2016.
“These areas are the ones that have currently been underperforming. Anywhere that homes are $2 million or above hasn’t boomed like the rest of the market has recently,” Christopher said.
“But next year, the affluent areas, particularly the Eastern Suburbs and some areas of the Lower North Shore, are going to be the ones that show the most improvement,” he said.
Christopher predicts prices in the Eastern Suburbs will grow by between 8% - 13%, as the area benefits from the performance of the NSW economy.
“It’s not going to be rapid growth. It could quite possibly be in single digits,” he said.
“The state economy is still running hard at the moment and historically we’ve seen when that happens that the top end of town performs better.
“The other reason is that a lot of investors are shutting up for the moment in Sydney, so a lot of the activity that’s been driving the other areas in the city just won’t be there next year.”
Western Sydney in particular is likely to see a drop off in activity, especially over the short term.
“Since 2010 or so Western Sydney has been performing strongly, but right now I think it’s come to the end of that phase.
“Long term, I don’t think the area is finished, but for the time being I think we’re going to see a slowdown.”
According to Christopher, over the last three years Sydney’s South West has been the best preforming location for units, with median prices having risen by 52%, while Parramatta
has been the best performing are for houses with the median price up by 53%.
While Christopher said some areas of the city will continue to grow, he said Sydney is set to lose its crown as the nation’s premiere market.
“Next year we’re predicting Melbourne to overtake Sydney as the best performing market and for there to be a lot of investment activity there.”
Louis Christopher will speak at The Property Buyer Expo that takes place 30 October until 1 November at the Sydney Showgrounds in Homebush.
Come say hi to the YIP team at the Expo and hear from some of the best minds in Property. Get your free tickets by entering the code YIPPBE when you register at www.propertybuyerexpo.com.au.
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