Those looking to invest in the Harbour City will no doubt be buoyed by the news that Sydney property is about to get cheaper.
According to new market projections released in the QBE Housing Outlook 2017-2020 report, the median price of a Sydney apartment will fall by $30,000 over the next three years, while the median price of a house is expected to drop by about $27,000.
While a typical house in Sydney today costs $1.177 million, this will drop to $1.15 million by June 2020, while the average unit price will drop from $790,000 to $760,000 in the same time.
However while housing prices in all other capital cities except for Darwin are set to rise in this time, the report predicts that the lowered property prices will turn Sydney into one of the weakest capital city housing markets.
Unit prices are also predicted to drop in the vast majority of Australia, with Brisbane (7.2 per cent drop), Melbourne (4.8 per cent) and Sydney (3.8) the cities set to see the biggest reductions in price.
The report states that less activity from foreign investors, who in the recent years have dominated the market, would be the key to unit prices falling in Sydney.
“Capacity for investors to enter the market or pay higher prices is limited. This will put downward pressure on unit prices as investors retreat from the market,” the report says.
While a housing shortage was a major influence in the booming Sydney property market between 2012-2016, recent increased home building has taken the momentum out of the market, which will naturally lead to a drop in prices.
Phil White, CEO of QBE Lenders’ Mortgage Insurance, told news.com.au the apartment sector will become one of the major influences on the property market in the coming years.
“With so many Australians priced out of the housing market, the Australian dream of owning property is increasingly turning to high and medium density apartments,” said White.
“Units contribute to a greater share of the market as changing lifestyles and affordability dictate property choices,” he said. “Encouragingly, that dream should become a reality for more Australians, with improving affordability overall.”
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