Sydney Market Review

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From: Samuel Riley


Here's a Sydney property market review by John Mcgrath (Director of Australia's most successful agency) Does everyone agree with his opinion? any other thoughts to add? From what I can see judging by what he is saying. The Sydney property market is NOT overvalued relative to current market conditions.

Have fun :)

Sam

MARKET REVIEW
by John McGrath


As we move past Easter the first selling season of the year is behind us providing an opportunity to review the market as it stands in 2001. And the news is positive for those who have managed to snare the right property & somewhat disappointing for those hoping that a market correction was upon us. In fact our evidence suggest that the market in the quality residential precincts throughout Sydney is up about 5% to 7% this year over last year's closing figures.

And there are three reasons for this. First are the lowering interest rates (which are at their lowest for 30 years right now) which assist the property market in two ways. Put simply they make it cheaper to borrow on property (currently at about 5.6%) & provide less incentive to leave your money in the bank earning the low yields now on offer.

The second factor driving the market is the volatility of the share market which has seen many small (& large) players with burnt fingers taking their investment dollar to a more secure option - namely bricks & mortar.

And finally the low Australian dollar has certainly created a buying spree for offshore investors (especially ex-pats) taking advantage of the exchange rate & buying our property at what amounts to half price in many instances. Australian ex-pats in London, Singapore, Hong Kong & New York lead the charge with about one-third of the properties our company sold above AUD$1 million last month selling to offshore buyers.

I predict ongoing growth in select suburbs throughout the year as many cashed up purchasers dive back into property both from a lifestyle & an investment perspective. A few areas to watch for growth are Maroubra, Leichhardt, Marrickville, Lane Cove, Naremburn & Dee Why.

John McGrath
 
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Reply: 1
From: The Wife


But, Thats kinda like asking the butcher, are your steaks to expensive?

Guess what his answer will be.

TW
~Life is a daring adventure, or nothing at all~
 
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Reply: 1.1
From: Samuel Riley


Yeah I thought of that but all the figures and reasons John states in his article is based on actual facts.

"And finally the low Australian dollar has certainly created a buying spree for offshore investors (especially ex-pats) taking advantage of the exchange rate & buying our property at what amounts to half price in many instances.

and...

"First are the lowering interest rates (which are at their lowest for 30 years right now) which assist the property market"

and....

"In fact our evidence suggest that the market in the quality residential precincts throughout Sydney is up about 5% to 7% this year over last year's closing figures."

Notice he says "quality residential precincts" and I have heard John say that in his opinion there is an oversupply of what he calls "B" grade property in Sydney, Also John is a successful property investor himself. None the less I take your point but I just thought it could be of interest to some...

Cheers,

Sam
 
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Reply: 1.1.1
From: The Wife


Samuel,

I'm sure its of great interest to everyone, including me !


~Life is a daring adventure, or nothing at all~
 
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Reply: 1.1.1.1
From: Sergey Golovin


Was article in Telegraph yesterday and says that top QLD. market is picking up as well.
When is the rest of them quite steady. (?)

Regards
Serge G.
 
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Reply: 1.1.2
From: Terry Avery


The following comment by John has to be one of those classic wool over the
eyes lines:

And finally the low Australian dollar has certainly created a buying spree
for offshore investors (especially ex-pats) taking advantage of the exchange
rate & buying our property at what amounts to half price in many instances.

Just because the exchange rate is favourable doesn't mean the expats are
buying at half price. They are still paying the full, or above market price.
As with all investments one should look at value for your money. It is very
fuzzy thinking to believe statements that you can buy cheap because your
hard earned pounds have a higher value. On that basis any overseas investors
out there want to buy some property? I will sell you mine for say 200% of
the market price here, after all your pound is worth 3 times the aussie
dollar so its cheap for you isn't it?
 
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Reply: 1.1.2.1
From: Robert Longmore


ok then, what effect will the apparent over supply of inner city apartments have on that market?
simple supply and demand, the demand is there, but the supply will shortly overtake the demand. I dont think this will effect the sydney market as a whole, just the small 1-2 bedroom unit market in syd. But i could be proved wrong! the one thing i did learn in the share market, No one can predict the future.
 
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Reply: 1.1.2.1.1
From: See Change


just my two cents re the area I know ,
(upper north shore).

The market was quiet until about 4-6 wks ago as there ( IMHO ) was concerns about the overall economy after various bad news from US share market etc. As these concerns have eased ( not sure if that's justified yet ) people have come back into the market.

The lower end of the market (5-700k) doesn't have much in the way of supply and anything vaguely interesting is moving quickly. There are a lot of houses in the next level up ( 7-900) and well presented properties are getting interest but poorly presented houses ( bad location , tacky reno's, over priced etc ) are being bypassed.


There is not much supply over this price and there are quite a lot of people looking for houses , new, 4-5 beds, close to station for over 1 M. Houses in this bracket that are well presented , good position are getting queues outside them on open days and one recently sold well over ( apparently ) reserve.

happy investing see change
 
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