Historically tight vacancy rates and increasing rental yields are beginning to lure investors back into the Sydney property market – and with values slowly creeping upwards, there seems no better time to buy than now
Properties in Sydney are finally beginning to enjoy a more significant upturn in value, with capital growth of 3.56% recorded in the three months to May 2007, according to Residex. The regional property market has delivered a softer growth rate of 1.69% across the same period, but median rental yields hover around 4% across all NSW markets.
Cristine Castle, president of the Real Estate Institute of NSW (REINSW), says that although clearance rates at auctions are improving, indicating an increasing number of buyers in the Sydney market, more investors are required in Sydney to “lift the supply of rental property”.
“The Sydney market is stable and it’s unlikely that prices will drop further,” Castle says.
“We need investors to come into the property investment market to provide homes for those families that have no alternative but to rent.”
As rents continue to increase and vacancy rates remain at a historically tight 1.3% across Sydney, several industry experts, including the president of the Real Estate Institute of Australia (REIA), are tipping the Sydney property market as being on the verge of a recovery.
“While the Sydney market has probably been in the doldrums of late, I’d think that will start to lift in the next 18 months,” says REIA president Graham Joyce.