I thought this would generate some interesting thoughts about what's happening in different areas of sydney. I don't have any properties in Sydney at present, although I live (just recently). So would anyone care to comment and give me some fantastic insight to the Sydney market (other than it's not that contagious (a la Jacque) as prices are exy. Jane
First thing to note (and I'm sure you're already aware of this) - Sydney has a lot of different markets - each performing slightly differently. For example, the market for houses between $1m and $2.5m on Sydney's lower north shore is still very strong, with recent record prices set in Artarmon in that price bracket ($2.35m) - and other properties still selling, albeit a little bit more slowly than in previous years. Units are still selling ($400K - $600K), quite a bit more slowly, but they are selling without major discounting. A 2BR unit in the low-rise block we just moved out of in Artarmon sold for $420K earlier this year, and I'd say they'd get similar or only very slightly less for it now based on what else has been selling. So in the micro-market I watch, my analysis concludes that units have come back a little, but not much (certainly no oversupply), and houses are still holding value, possibly even slightly up (mostly due to stock shortages of good quality homes). Houses in less desirable locations (busy roads) or in poor condition are taking a longer time to sell though - good location and good quality houses are selling well. Sounds pretty typical of a lacklustre market really - only really owner occupiers driving it, most of the investors seem to have gone away.
The abolition of the recent vendor tax was a start in pulling up what was shaping up to be a fairly flat market. The reintroduction of the land tax threshold was also a good move, however Sydney still remains one of the most unaffordable cities in the world. Yields in most areas remain lacklustre and auction clearance rates are nothing to crow home about. I still believe another 2-3 yrs of rising rents is needed to bring about better and increasing investor interest. The media tells us rents are on the rise, but it's still area specific, and really only applicable to those suburbs which aren't oversupplied with tenants already. The last boom managed to generate so much investor activity that it was inevitable that tenants would be the clear winners. That said, there are always good buys and great yields out there- you just have to do lots of research and be patient
