The day after the budget is handed down a lot of clients have been discussing the impact and questioning us where to from here for the Sydney CBD prestige market?
Stepping away from the effects of the budget on the local market and looking more broadly at the consistent trends we have noticed in our market my thoughts are that the growth we have been experiencing over the last 5 years will continue for the remainder of this year.
The market over the last year has had some very common trends occurring, those same trends are continuing today and we expect them to do so for some time now.
Those trends are:
1. Owner occupiers are leading the purchasing over investors.
2. Domestic purchasers are outpacing foreign investors as supply continues to tightened an the awareness of quick exchange and completion have become the norm.
3. Savvy investors have decided to cash in on a prime sellers market. According to latest Savills research (Sophie Chick) over the last 5 years in Sydney has grown by 86.4 per cent and 11.6% in the year to December 2016.
4. Off market or 1 month campaigns have become standard for properties genuinely seeking sales solution. Private treaty continues to be the preferred method of sales for the best results. We continue to have demand for a broad range of products in the market place, demand that is not being sated by supply.
5. Foreign purchasers continue to place pressure on the greater market as Sydney is considered internationally very good purchase proposition.
This upward trend is set to continue despite affordability pressures on the broader Sydney market. Sydney’s livability, economic stability and quality education continue to draw international buyers, and locally there has been a surge in demand from downsizing retirees and younger professionals. Further despite affordability pressures locally, new policies such as increased stamp duty for foreign buyers are unlikely to significantly impact demand from the wealthy.
Meanwhile supply of new luxury properties remains constrained. Those that have come to the prestige Sydney CBD Market like Opera Residences on Macquarie St (sold in a day the entire offering of the development off plan at average of 56,000pm2) and those yet to come on like Lend Lease’s Barangaroo’s 1 Sydney Harbour and the very eagerly anticipated Wanda development Sydney One may see price per m2 of between $60,000 and $90,000. This clearly puts the existing stock in quality prestige buildings in prime purchase recommendation as the are ranging presently from $12,000 to $35,000 per m2.
Our recommendation is if you see a property you want and have the means to quickly secure it, strike with your best offer and sign contracts asap.
This market continues to be a prime selling market yet in giving advise to potential purchasers I would say that prices will rise and opportunities will remain scarce so 100% get into the market.
Sydney our living city continues its evolution and we are still in the early stages for a city from an international perspective. One thing is clear though the growth surge will continue.
To capitalize on the market should you be thinking of selling come see Travis or myself and lets discuss the value of your asset and how to best maximize its potential.
P: 9252 3511 or 0414 347 713 for Travis or 0411 73 11 33 for Tim.
Email us on email@example.com or firstname.lastname@example.org
We look forward to hearing from you.