Why Buy Real Estate in Sydney
Over the past few years, the real estate market in Sydney has experienced minimal price movement - but not all of Sydney!
There are many suburbs in Sydney that have continued to increase in value. Some of the more expensive areas have achieved growth, albeit at a slower rate. Balmain, Bondi, Mosman and Palm Beachs are some examples of these.
If you intend at some stage to buy in Australia in suburbs located in the Eastern Suburbs, the Lower North Shore, the Northern Beaches or the Upper North Shore, you should investigate now otherwise you may find yourself paying more than you intended or missing out altogether if your affordability is tight.
It is highly likely that in 2007, we will see growth in more and more suburbs within the regions mentioned above. Some of the reasons include:
Interest rates set by the Reserve Bank of Australia are unlikely to increase
- Local affordability is improving
- Demand will increase
- Home loans will become more affordable
The Australian economy is strong
- The budget is still in a surplus
- Unemployment is at very low levels
- GDP growth figures have remained positive
- Consumer demand is increasing
The property market has remained weak since late 2003
- Developers have not been very active due to few buyers in the market and profits being slim or non existent
- As investors have left the market, the number of rental properties has reduced causing rents to rise significantly
Retirees selling investments to put funds into Super
Until June 2007, people can place up to $1 million into super with out penalties. We are now seeing an increase in the number of investment properties on the market. This is fuelling the market and buyers are looking for bargains. It is also putting further pressure on the number of properties available for rent.
The increased demand by renters looking for a property to move into has allowed investors to significantly increase rent.
In 2006, the average rent in Sydney increased by nearly 10%.
The current set of factors makes the timing for buying a property is almost as perfect as you will ever find. You will receive a really good rental return ie income on the property and be able to still buy the property at the bottom of the property cycle with only upward potential based on current conditions. It doesn't get better than that.
Population growth
- migration is strong and still increasing due to employment opportunities
- people are living longer
- the number of people in each property is going down - alot of people are now living alone and this is increasing
All of these factors increase demand for housing and in turn, increases prices due to lack of supply. An investor is now in a position to profit.
