Sydney property themes
Sydney’s property market has long been the strongest performing city market in Australia. According to data compiled
by Michael Yardley, Sydney property prices have increased more than ten-fold since 1980, which is well in excess of all
other Australian capital cities. However, more recently Sydney property prices have been weaker on a relative basis as
buyers have more focused on the smaller cities and regional areas whilst the longer term impacts of COVID-19 are being
digested. Smaller cities such as Brisbane and Perth have been the strongest performers so far in 2021 along with a
number of regional areas, whilst Sydney and Melbourne have been at the back of the pack. So the key question is: is the
recent property weakness in Sydney a buying opportunity, or the start of a longer term period of under-performance?
As a starting point, let’s look at what the leading property analysts are expecting... Most forecasters are predicting high
single digit growth for Sydney real estate in 2021:
- ANZ Bank expect Sydney property values to increase 9% in 2021
- Riskwise expects Sydney property values to increase 8-12% in 2021
- CBA expects Sydney property values to increase 7% in 2021
- NAB expects Sydney property values to increase 7.3 % in 2021
- SQM expects Sydney property values to increase 7-11% in 2021
These generally positive outlook expectations are based upon strong supply-demand fundamentals, even without the
usual demand from migrants due to COVID-19 travel restrictions. Auction clearance rates across Sydney are already
back at the 70-80% level which historically suggests there are more buyers than sellers.
And in terms of key themes to be aware of, the forecasters are generally expecting most market segments in the Sydney
market to participate on the upside apart from inner city and high-rise apartments. This high-rise end of the market is
likely to continue being impacted by the move away from population-dense living in the aftermath of COVID-19. And
the converse of this inner city slowdown is that demand for high quality space is likely to continue increasing throughout
2021 as property buyers gravitate towards lifestyle-focused property. This is likely to be reflected in particularly strong
price appreciation from high quality properties in Sydney’s inner and middle ring suburbs, as well as Sydney’s larger
regional locations such as the Central Coast, and Sydney’s beachside suburbs.
Rashed Panabig, Landen’s Director, agrees the evidence is in support of continued price appreciation in the Sydney
‘The outlook for Sydney property is generally positive, but with some important themes to be aware of. Sydney is one of
those markets which always looks expensive to prospective buyers when they are considering investing. However, in
hindsight, the purchase prices paid are often bargains. All the long term structural trends remain on track for this to once
again be the case at the end of this year and beyond.
Advantages of investing in property within an SMSF
As more and more investors are choosing to manage their own superannuation through Self-Managed Superannuation...