When it comes to capital city market performance, Sydney has retaken the throne from Hobart, but this hasn’t necessarily translated to confidence among consumers.
The findings of the lastest ANZ/Property Council Survey indicate that property industry confidence in NSW fell in the last quarter from 126 to 116. The report suggests that this decline has been primarily driven by weakening macroeconomic conditions and a drop in forward work expectations. Consumers are anticipating slow growth in the national economy and GDP.
Nonetheless, there is some positivity to be observed in the findings – NSW houses are expected to see strong growth as the outlook for the state government is rosy. The availability of housing finance is on the up following the recent downturn, and construction activity looks set to pick up in the near future.
“It is great to see an improvement in the residential sector, with strong housing supply integral to our state’s economic future. Housing supply and affordability was front of mind as an issue for respondents,” says Jane Fitzgerald, the executive director of Property Council NSW.
“With a weaker national economy on the horizon, it is imperative that we do not lose sight of the importance of reforms in enabling NSW to continue to thrive, allowing for continued investment in the property sector and jobs growth for the people.”
In line with the improvement in the overall market, rental vacancies have been tightening again in Sydney, with the average vacancy rate hitting its lowest number in 2019.
According to the Residential Vacancy Rate Report for September 2019, the vacancy rate in the capital dropped by 0.7% in August 2019, which has helped reduce the percentage of total vacancies to 2.9%. This is the first time this figure has been below 3% since November 2018.
“We haven’t seen Sydney’s vacancy rates this low since October . With a reduction in the available rental supply, we could see upward pressure on rents,” says Tim McKibbin, CEO of the Real Estate Institute of NSW.
“The Hunter region continues to prove popular, with just 1% of rental properties there left unoccupied, while the Illawarra region is back to July’s low rate of 2.2%. We do typically see vacancies decrease in the warmer months, so we can expect rates to remain low across NSW into the new year.”
SUBURB TO WATCH
BOWRAL:Units outperform houses
Units are surging forward while house values are falling back in Bowral, which is a suburb of the largest town in the Southern Highlands of NSW.
Unit prices increased by 6.7% in the 12 months to September 2019 to a median of $652,407. This followed a trend of double-digit growth observed since 2014. While houses have also maintained a positive streak for a number of years, values dropped by 4.4% in the past 12 months.
Bowral serves as the business and entertainment centre of the Wingecarribee Shire and is home to hospitals and many schools. Sydneysiders also favour it as a ‘dormitory suburb’ despite its distance from the CBD.
Amenities: As a commercial and entertainment centre, Bowral has a whole host of amenities
Growth: The property market in Bowral has recorded double-digit growth for several years