Demand for Sydney’s inner-city apartments is predicted to increase slightly this year with a more pronounced upturn to follow in the coming two to three years.
BIS Shrapnel, who released the forecast today, said strong growth in rents due to the ongoing undersupply in the inner-city market will push property price growth.
“It’s a story Sydneysiders know well,” said Angie Zigomanis, BIS Shrapnel senior project manager. “We’re simply not building enough apartments in the inner Sydney area.”
According to BIS Shrapnel, rising interest rates are predicted to dampen investor demand and price growth in the short-term but values look set to accelerate in 2009/10.
It predicts the market will then peak in 2011/12.
According to the research house, Sydney apartments will grow in value by 29 per cent over the five years to 2012, while rental costs are tipped to grow by 44 per cent over the same period.
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