2019 tipped to be a good time to buy in Sydney
The Sydney housing market is set to shift further in favour of buyers in 2019 as property prices continue to ease, providing significant opportunities for savvy investors and first home buyers.
After a decade of sustained and unprecedented growth, Sydney real estate prices retreated over the past 12 months as tighter lending conditions, the banking royal commission, sluggish wage growth and less demand from investors and foreigners dented the market.
According to industry experts the softer conditions will likely continue across much of Sydney next year, making it an ideal time for bargain-hunting buyers to consider entering the market.
CoreLogic-Moody’s Analytics Australian Home Value Index Forecast1 predicts that property values will continue to “diverge” across Australia in 2019, with prices likely to dip further in Sydney.
“House values in Sydney and some parts of Melbourne are expected to decline while values in Adelaide, Brisbane, Canberra, and Hobart are expected to see further growth,” it suggests.
Another expert analyst, QBE2, also predicts lower Sydney house prices in 2019, tipping a fall in median house prices of 3 per cent.
“The combination of increasing numbers of apartments coming online, weaker underlying demand, an out-of-cycle interest rate rise in August 2018 and weaker investor activity is expected to cause a further fall in the median house price,” its Australian Housing Outlook 2018-2021 report states.
However, after continued easing next year, QBE expects the market to tighten again in 2020 resulting in “forecast 2 per cent growth to take the median house price to $1,090,000 by June 2021”.
Commsec senior economist Ryan Felsman3 points to an ongoing rebalancing of supply and demand as a driver of softer prices as fewer property investors take out loans.
“Over the coming year, we expect variable capital city and regional home price direction. While some capital city home prices will fall, others will lift,” he says.
“There will be winners and losers. While home prices are retracing in Sydney and Melbourne, prices are still up by 45-50 per cent over the past five years.”
Pick up a bargain
REINSW’s Rich Harvey4 says while some buyers could be nervous about further price falls, 2019 will be a good time to look for bargains.
“It is a good time for home buyers to consider getting into the market, upsizing or downsizing while the market takes a breather,” he advises.
“Vendors are more inclined to negotiate in a falling market so buyers can generally get a better price and have more time to make decisions.
“Prices in high-demand and well-established areas will nearly always hold up well, even in a market downturn. One of the biggest challenges for buyers is not to over-pay in this market.”
Infrastructure developments support market
Real estate expert John McGrath5, meanwhile, believes infrastructure projects such as the proposed airport at Badgerys Creek and the Northern Beaches hospital will support property prices in Sydney.
“The airport is one of several infrastructure projects in Sydney that will re-rate local home values while the rest of the market is cooling,” he writes at Switzer Daily.
“(There’s) the Northern Beaches Hospital, the Sydney Metro Northwest rail will be running in the first half of 2019 and the CBD and South East Light Rail and the second stage of WestConnex will follow in 2020. There is much to be excited about.”