Number of distressed sales fall in New South Wales

Distressed-sales-in-New-South-Wales-declined-in-the-last-quarter-_157_6004103_0_14101394_300Investors can look at a number of factors when choosing the perfect investment location. Economic strength, house prices and rental yield data all provide an insight into the quality of a market, but the quantity of distressed sales can also indicate where business activity is the strongest. Once again, New South Wales is performing well in this area. According to LandMark White’s Forced Sales Monitor, the pursuit of high yielding assets and improving economic conditions have meant fewer mortgagees put their properties up for sale.

This is a promising sign that the business sector is beginning to pick up and spells excellent news for investors in the Sydney market. While the December quarter saw the highest number of forced sales for the year, this is substantially lower than the same period a year prior. Only 12 per cent of total national listings were distressed sales in Q4 2014, compared to 17 per cent a year earlier.

The proportion of forced sales fell 6 per cent for the December quarter, which Max Gran, research analyst at LandMark White, attributes to a growing and highly concentrated population and consistent overseas interest. This has created a more secure environment for investors.

“In general if you’re in the metropolitan regions especially in places like Melbourne and Sydney you’re not going to see much forced sales in those spaces because they’re currently going through booms,” Mr Gran said, according to Your Property Investment Magazine.

By comparison, 60 per cent of distressed sales were located in Queensland in the final months of 2014, continuing an upward trend for distressed sales. Mr Gran said the slowing commodities sector is having an impact on mining towns in particular, where economic support from a single industry is slowly being eroded.

An solid alternative for investors is the larger centres like Sydney, where shocks to one sector can be offset by strong performances in others. The Harbour City’s booming property market and powerful economic growth mitigates risk, making it the perfect investment locale.

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