Sydney price growth to slow, report predicts

The-property-balance-could-be-tilting-back-in-favour-of-buyers-_157_6016059_0_14102407_300With eye-watering prices becoming a feature of everyday life in Sydney’s real estate market, those buying houses will no doubt be looking for some kind of relief. New research from BIS Shrapnel could come as a breath of fresh air given the red hot real estate conditions, with the firm predicting that markets across Australia will slow over the next few years.

BIS Shrapnel’s Residential Property Prospects 2015-2018 highlights that low interest rates and a dwindling supply of new dwellings has supported price growth in the past. However, the next few years could see an increasing number of homes come onto the market. In particular, multi-unit developments have taken off across the capital cities, which could ease pricing pressures.

In fact, there have been a record number of these properties heading for construction over the past financial year. Multi-unit dwellings accounted for 45 per cent of the total number of starts in 2014-15, according to BIS Shrapnel, at 95,500 homes. CoreLogic RP Data also found the Sydney has posted among the highest volumes of units in 2014-2015, with Parramatta, the central cityand inner south having the strongest showing in the Sydney region.

“As these projects are progressively completed, strong tenant demand will be required to support rents and consequently values upon completion,” BIS Shrapnel Senior Manager Angie Zigomanis said.

The result of this could be a slowdown, allowing buyers – especially first time purchasers – to get a head start in the property market. Median house prices are expected to fall around 4 per cent over 2010-2017 and 2017-2018, which would mean total growth of just 2 per cent over the three years to June 2018.

In fact, the growth rate is expected to fall back to 7 per cent over 2015-2016. This is a cool glass of water compared to the rapid 16.23 per cent experienced in the 12 months to June 30, according to CoreLogic.

With the market on track to abate over the next few years, this could lead to an increase in home buying.

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