INVESTING INTELLIGENTLY TOWARDS 2019/2020
CSIPROP INVESTMENT GUIDE
SYDNEY
Sydney Sydney’s housing market, historically the most expensive Down Under, has been hit the hardest by APRA’s regulatory measures. House prices had declined through 2018 alongside weakened investor demand, affecting construction activity and supply levels in the future. However, strong economic conditions, population growth and the NSW government’s expenditure into infrastructure will help moderate the slowdown. Prices are expected to stabilise in 2019 before picking up in 2020.
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New South Wales
Australia 3.1% 2.8% 1.6% 2.7%
State Final Demand Growth Over year to 4Q17
Retail Turnover Growth Over year to Mar 2018
Population Growth Over year to 3Q17
Employment Growth Over year to Apr 2018
3.0% 3.0% 1.6% 4.1%
NSW continues to boast a strong economy in spite of the slowdown in the housing market. Source: JLL, ABS
Hotspots Sydney’s eastern suburbs saw the lowest decline in demand as of July 2018. Suburbs like North Bondi sold quickly while Tamarama saw very high price increases. Freshwater, Paddington and Cammeray recorded the highest demand for houses while Fairlight, Cremorne Point and McMahons Point recorded high demand for apartments at the start of 3Q2018. The western suburbs of Sydney are showing some positives, with suburbs like Leppington, Parramatta and Blacktown listed on the HIA Hotspots Report as some of the Top 20 hotspots across Australia for building and population in 2018. The rate of population in these areas are faster than the national average and at least A$150m worth of residential building work was approved in 2016/17.
Of all the capital cities affected by tighter financing conditions and less investment activity in the property sector, Sydney is the hardest hit. Data shows that prices have dropped about 7.4% in the past 12 months. It’s not all gloom and doom: BIS Oxford Economics has predicted that Sydney will see a 3% price growth in the next 3 years. Low interest rates, the city’s relatively stable economic environment and population growth, as well as the state government’s A$15.3bn expenditure into infrastructure over 2018-19, could help in keeping the correction slight.
New South Wales
Research Report: Sydney
New South Wales Key Economic Indicators
Tighter financing conditions and less investment activity have had the most impact on Sydney’s housing market conditions. Source: Australian Property Market Report July 2018, realestate.com.au
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HIA National Top 20 Building & Population Hotpots 2018: Sydney
Statistical Area 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Mickleham - Yuroke Pimpama Cranbourne East Cobbitty - Leppington Riverstone - Marsden Park Wollert Docklands Beaconsfield - Officer Point Cook - East Truganina Melbourne Coomera Cranbourne West Melton South Tarneit South Brisbane Springfield Lakes Arncliffe - Bardwell Valley Southbank Homebush Bay - Silverwater
Statistical Area Level 4 Mickleham - North West Gold Coast Melbourne - South East Sydney - South West Sydney - Blacktown Melbourne - North East Melbourne - Inner Melbourne - South East Melbourne - West Melbourne - West Melbourne - Inner Gold Coast Melbourne - South East Melbourne - West Melbourne - West Brisbane Inner City Ipswich Sydney - Inner South West Melbourne - Inner Sydney Parramatta
State / Territory VIC QLD VIC NSW NSW VIC VIC VIC VIC VIC VIC QLD VIC VIC VIC QLD QLD NSW VIC NSW
Residential Building Annual Population Approved, Growth Rate (%) 2016/17($’000) 222,872 352,035 638,571 610,382 736,224 173,239 199,734 256,005 169,300 202,036 622,251 173,540 171,594 161,037 299,838 154,000 184,943 513,026 417,688 358,252
35.3 30.8 27.4 21.9 21.1 20.8 14.7 13.4 12.8 11.9 11.2 10.3 9.2 9.1 9.0 8.8 8.7 8.6 8.6 8.0
Four of Sydney’s suburbs made the HIA National Top 20 Building and Population Hotspots list in 2018. Source: HIA The inner west, western and northwestern corridors; as well as the outer northwest and outer southwest growth corridors also show potential for growth.
Quick Facts: Sydney . Strong job & population growth . Property prices expected to climb again in 2020-21 . Leppington, Parramatta, Blacktown & Arncliff ranked in Top 20 property hotspots
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Suburbs showing signs of gentrification are great for investment. Data from the Property Investment Professionals of Australia has identified the following suburbs for a makeover in the near future: • Arncliffe • St Peters • Tempe
Words VIVIENNE PAL
Research VIRATA THAIVASIGAMONY VIVIENNE PAL IAN CHOONG
Design & Layout AHMAD MUNAWAR ABD RAHIM JANE TAN
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