Residential and commercial property market update...
Sydney property prices prove resilient
Sydney has bucked the trend and recorded positive price growth, giving investors reason to be optimistic
SYDNEY’S PROPERTY price growth outstripped growth in the other capitals in December, with the latest research from RP Data showing Sydney had the largest volume of reported sales that month.
Property values grew by 0.4 per cent over the month and by 0.7 per cent for the quarter.
Australia’s remaining capital cities failed to record positive growth, with Hobart the hardest hit.
Dwelling prices in the Tasmanian capital fell by 2.7 per cent, with Perth not far behind, suffering a 1.6 per cent drop.
Melbourne rounded out the bottom three, recording a 1.3 per cent fall in dwelling values.
Despite the falls, RP Data’s director of research, Tim Lawless, says the news isn’t all bad.
“The December quarter was the year’s smallest quarterly decline,” Mr Lawless says.
“According to the RP-Data Rismark Index, capital city home values fell by 1.5 per cent in the March quarter, and by a further 0.8 per cent in each of the June and September quarters. This rate of decline had decelerated to 0.5 per cent by the final quarter of 2011.”
In 2011, Australian capital city dwelling values experienced a capital loss of 3.5 per cent.
Regional house values fared a little better, correcting by around three per cent.
The trend is only set to improve, according to Rismark’s managing director, Ben Skilbeck.
“We expect the RBA’s interest rate cuts in the final two months of 2011 will lend further momentum to housing activity as transaction volumes pick up,” he says.
“If financial market pricing for substantial additional RBA rate cuts proves accurate, we could see a stronger than expected bounce-back in housing conditions.”
Infrastructure a driving force in Sydney commercial market
An increased focus on infrastructure in Sydney will determine which of the city’s industrial areas enjoys the strongest rental growth over the next few years, CBRE claims
CBRE’S LATEST Market View Report has found infrastructure will remain the main driver of investment and occupier demand in Sydney. This will result in the city’s south and outer western regions recording the most significant rental growth as tenants focus on opportunities around port and major road links.
However, CBRE research analyst Gareth Dingle said Sydney’s industrial market outlook was heavily reliant on the performance of Australia’s trading partners.
Infrastructure spending allocations and consumer and business sentiment also played a larger role in how the industrial market fared.
“New South Wales is lagging the nation when it comes to investing in transport infrastructure, which is central to the performance and outlook for the industrial property market,” Mr Dingle said.
That being said, a lack of supply across Sydney is putting upward pressure on net face industrial rents, particularly in the south and outer western sub-regions.”
The latest Market View Report shows new supply completed during 2011 totalled just over 360,000 square metres of industrial space.
This was largely fuelled by pre-commitments.
CBRE NSW’s director, industrial and logistics services, Jason Edge said development activity was forecast to increase during 2012.
“A number of these projects are major distribution centres for large retailers in Sydney’s outer west sub-region, and are now nearing completion” Mr Edge said.
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