While rate hikes, a fall in building approvals and ever-increasing prices may be putting many buyers off the expensive Sydney market, Quartile Research insists these are excellent conditions for investors.
“Now is the time to look seriously at acquiring property in the Sydney market,” says CEO Brett Johnson.
“The housing crisis of the mid-eighties was a beauty, with plummeting rental vacancy rates, strongly rising rents and … a period of extraordinary growth in values of near 100% in just over two years.
“From an investment point of view, the current conditions in the Sydney residential market, just like back in the mid-1980s and 1990s, are sowing the seeds for the next significant upturn in both rents and prices.”
And while the media obsesses over affordability issues, Johnson stresses that the economy is in good shape and the future looks rosy.
“You’d be forgiven for thinking the economy had fallen apart, unemployment was going through the roof and things were generally in a bit of a mess... but, fact is, they aren’t,” he says.
“In the Sydney market, we are finding conditions are much like those at work in previous housing cycles, in particular the periods around 1984 and 1993. Both of these periods were around four years after the cyclical peak saw declining vacancy rates and were the beginning of periods that ultimately proved to be a great time to buy.
The current market is experiencing similar conditions, with the added benefit (from an investor’s point of view) of a dramatic drop in building approvals which translates into fewer building commencements, therefore fewer building completions and presto... a housing crisis! In other words, Sydney residential property is becoming an increasingly scarce commodity.
