Sydney Property Market Update for March quarter 2009*
| Sydney | Mar quarter median |
% change Dec 08 – Mar 09 |
% change Mar 08 – Mar 09 |
| House Price | $527,000 |
-0.5 |
-4.4 |
| House Rent ( 3 b/r) | $350 pw | 0.0 | +9.4 |
| Unit Price | $364,000 | +0.8 |
-1.5 |
| Unit Rent ( 2 b/r ) | $400 pw | 0.0 | +11.1 |
| Vacancy rate | 1.2 |
-0.2 | +0.2 |
* This is the most up to date available – property data is released 3 months after the end of each quarter.
Source: Real Estate Institute of Australia
The Great Australian Property Shortage
2009/10 is shaping up as one of the deepest periods of undersupply in Sydney’s residential property market on record. After 6 years of declining building approvals and strong population growth – there is simply not enough property to go around. The rental vacancy rate, which we regard as a leading indicator of state of supply and demand in the market has remained below 1.5% since February 2007, and the latest monthly figures show it at 1.0% (May 2009).
This has created enormous pressure on the rental market, which is facing shortages across the entire metropolitan area, with the outer suburbs experiencing the lowest rental vacancy for 11 of the last 15 months, which has also been where the highest rental growth has occurred.
The middle to outer distance medium density Sydney residential property, up to and around the current median value of $364,000 should do especially well in the short term.
A recent Australian Property Directions Survey by the Australian Property Institute summarised the views of a range of property investment experts on the position of the Sydney property market in the property cycle. Residential property is seen as being at the bottom of the cycle in 2009. In 2010, residential property in Sydney is viewed as commencing the next upswing of the cycle.
Certainly current auction clearance rates and property process are evidence in support of this. Rental demand remains very strong despite the fact that property ownership has become more affordable for people in all walks of life due to lower interest rates and the First Home Owner Grant.