There’s one word that can sum up the Sydney property market: Booming. From flourishing prices to frantic auction activity across the city, demand for real estate in the Harbour City is showing little sign of abating. Take the latest auction results from CoreLogic RP Data, for instance. In the seven days leading up to the Queen’s birthday weekend, auction volumes are expected to soar past the 1,000 mark for the fifth week this year.
But where does this leave your search for a home? In such a competitive market, the search for an affordable house can seem like a difficult task, especially when you’ve still got home loan payments to take care of.
However, a new report from the Property Council of Australia and CoreLogic would suggest that conditions are set to improve – especially if you’re after a newly built property.
Construction to reach record numbers
The latest Australian Residential Development Outlook points to yet another year of exceptional construction across the country, with the Sydney market in particular expected to reap the rewards. The report takes a look at some of the key indicators that influence residential development, including housing finance and investment, as well as economic factors like interest rates. Encouragingly, the report indicates that all signs are pointing up.
The report found that already the quantity of new home starts soared past expectations – in fact, there were around 198,000 dwelling commencements recorded in 2014. This is expected to continue well into 2016. Property Council of Australia Executive Director Residential, Nick Proud, predicted that new homes starts should remain at this exceptional level well into 2016, with numbers 30-40,000 above the long-term average.
Mr Proud also pointed out the bulk of this activity is expected to occur in Sydney and Melbourne – which has great implications for the future of affordable housing in the New South Wales capital.
“Recent improvements in new housing supply are expected to continue, adding tens of thousands of homes for Australian families and easing pricing pressures to improve affordability,” he said in a May 21 statement.
Economic engine room
It’s little wonder, then, that residential development has been identified as one of the key drivers of Australia’s economic growth in recent times. Data from the Australian Bureau of Statistics would certainly seem to suggest this. The value of residential building work nationwide expanded 4.8 per cent between the December 2014 and March 2015 quarters – and has skyrocketed 11.4 per cent over the 12 months to March.
Master Builders Australia CEO Wilhelm Harnisch noted that these figures confirm construction’s position as the nation’s economic stalwart. “The latest data shows that residential building continues to play a crucial role in the economy as the expected decline in mining related engineering construction continues,” Mr Harnisch said in a May 27 release.
With building activity far exceeding expectations, and the industry cementing its irreplaceable role in the economy, Sydney siders on the hunt for a home are sure to breathe a sigh of relief. If you’d like to make the most of these predictions, our team of home loan professionals at Customs Bank can guide the way.