Time to snap up a new property in Sydney?

Do-the-figures-add-up-for-new-build-property-in-Sydney_157_6011746_0_14101376_300As any seasoned investor will no doubt know, one of the first decisions to make when buying Sydney real estate is whether to opt for a new or existing property.

Each comes with its own set of merits, so it largely depends on what you want to achieve from your investment, as well as what long-term goals you have in mind.

If you do opt for a new build, then the good news is that you won’t be alone. The latest Housing Industry Association (HIA) New Home Sales Report shows that sales volumes are at their highest in five years.

Over the course of March alone, the HIA reveals an 11.3 per cent increase in multi-unit sales, while detached housing transactions were up 2.6 per cent from the previous month.

Building approvals are on the up

It’s not only new build sales that have increased, as there has also been an increase in building approvals throughout the country, the Australian Bureau of Statistics shows.

New South Wales property buyers will be interested to hear that the number of dwelling approvals in the state was up 4.4 per cent in March from February levels. This made it the highest increase in the country and much greater than Tasmania’s rise of 3.3 per cent, which ranked in second place.

As you might expect in a city such as Sydney, much of this construction took place in the high density segment. The HIA’s Senior Economist Shane Garrett said activity had reached “unprecedented levels” throughout the entire country in March.

“New home building continues to benefit from the exceptionally low level of interest rates, as well as strong population growth over recent years in the key home buyer age group,” Mr Garrett noted.

Assessing demand for Sydney property

Of course, no matter which type of property you decide to invest in, you will need to make sure there is going to be sufficient demand from tenants.

Sydney’s market is notoriously tight, with properties generally not spending many weeks on the market before they are snapped up by buyers. The latest data from SQM Research reveals just how in demand Sydney homes are at the moment, as listing levels have declined across the Harbour City.

Investors will be humbled to hear that during April, Sydney witnessed an 11.2 per cent fall in listings from the previous month. On an annual basis, listings marked a decline of 13.7 per cent.

This not only indicates that there will be strong demand from tenants unable to find a property of their own, but also that there is likely to be plenty of competition to buy the home when it eventually goes up for sale.

Price rises continue

Another benefit of buying a new build property in Sydney at the moment is that the city’s exponential price growth of recent years is showing little sign of abating.

The Domain Group’s latest House Price Report revealed how the Harbour City has long been a standout performer.

“Sydney will continue to lead the pack in house price growth – clearly ahead of Melbourne, Adelaide, Canberra, Brisbane and Hobart, which are set to continue to record moderate prices growth on the back of improving economies,” said Domain Group Senior Economist Dr Andrew Wilson.

With more properties emerging throughout the NSW capital – and people being able to secure the finance they need to buy them – now could be the right time for you to invest. Sydney’s price growth stood at 3.6 per cent during the March quarter, bringing the median house price to $914,056.

Sydney’s new build market is thriving – so the question should be when, not if, you choose to invest.

Leave a Reply

Your email address will not be published. Required fields are marked *