The rampant growth in Sydney prices is unlikely to slow significantly this year, despite talk of price bubbles and unaffordability.
According to Andrew Wilson, chief economist with Domain, prices are set to grow another 7-10% in 2015 as demand continues.
“There’s certainly no sign of slowing down in Sydney prices. The local economy is strong, population is growing and there’s still severe undersupply of housing. This will underpin price growth and rental yield,” he said.
Wilson pointed out that while many experts blame investors for the rapid rise in prices, it’s actually the upgraders that are driving the price growth.
“A lot of it comes from the changeover buyers in the $1-2 million category, particularly in the Hills District, Northwest, Inner West and parts of the Upper North Shore.
These are very strong change over markets and there’s still very active buying. There’s still plenty of momentum in these markets so I expect the strong price growth to continue.”
Experts have been warning about the property price bubble in Australia for a number of years and in particular the Sydney market.
In the recent Demographia
survey, it has once again ranked Sydney as the third least affordable city in the world, and Australia has been named "severely unaffordable".
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