Spotlight on Sydney - Top end taking off...

[MichaelW]

Hi Guys,

I've been commenting for the last few months now how I think Sydney is set to outperform through the next leg up in the property cycle, and that the current environment represented a small window of opportunity to buy in advance of the imminent recovery.

It seems the rest of the world is not asleep to the value that Sydney represents on the global scene, and is aware of the potential for this market relative to other investment options. There's a great article in the SMH Domain section from the 6th June with some very interesting insights into current activity in Sydney top end unit developments linked here:

Spotlight on Sydney

Real estate agents and developers are reporting higher than anticipated interest from overseas both Australians working overseas and foreign buyers as investors rejig their portfolios aiming for long-term, secure returns following the global economic meltdown eight months ago.

"Inquiry is higher than it's ever been and, interestingly, it's cashed-up people," says a buyers agent at Sydney Slice, Deborah West, who says 80 per cent of her business is now from expats and foreign buyers.

"These people aren't buying because they've lost jobs and are coming home; they are buying because they see Australian property as more resilient to the credit crisis."

Foreign interest in the Sydney apartment market is a positive sign for the city's languishing residential property market, according to BIS Shrapnel's Jason Anderson.

He says interest from offshore buyers and developers could stimulate construction, create more jobs and improve the outlook for the overall Sydney housing market. A real estate strategist for Macquarie Capital Advisers, Rod Cornish, says large institutions and superannuation funds are expected to make "large transactions" in Australian real estate later this year.

"Some of the reasons that overseas interest may pick up include the relative performance of Australia's economy, a view by overseas investors that our housing market is not as distressed as many overseas market and government focus on boosting housing construction," Cornish says.

"Despite Sydneysiders disagreeing, most people see this city as very good value compared with what you pay in London, Paris or New York."

The principal at Laing Real Estate, Vicki Laing, who has also sold to foreign buyers in The Residence, says French buyers from New Caledonia, Swiss, Germans and British residents as well as business people from South-East Asia are all keen to buy a lock-up-and-leave Sydney property.

"Some are thinking about moving here in the future so want to buy a place and see how it goes, while others are just parking money," she says.

Very interesting times. We are "different" over here and the rest of the world is awake to the relative strength of the Australian economy to other developed countries and like the security of our bricks and mortar. Sydney is still a flagship city in global mindsets and our boutique top end developments are attracting a lot of attention abroad.

Happy days for Sydney resi investors. I must admit to an obvious bias given my top end unit development on the Northern Beaches so admit to a degree of confirmation bias in my research... Nonetheless, still a very intersting development (no pun intended).

Cheers,
Michael