The year of residential revival

With a NSW State Election in March and subsequent Federal Election in May, buyers and sellers were in a standoff until results were clear, given the proposal of Negative Gearing changes that would severely impact the ongoing feasibility for many to invest in real estate. 

After a Liberal win on both fronts, we began to see more confidence in investment and a willingness to transact which was further encouraged by the APRA changes to both the interest only loan cap for banks as well as the way banks were assessing borrowing capacities, which increased potential borrowing power for buyers. 

With renewed vigor, the second half of the year brought home a strong surge in price growth (6.2% for Sydney in the spring quarter, according to CoreLogic). The areas that saw most benefit from these increases were predominantly blue-chip suburbs where there was a clear shortage of detached housing.

Looking forward to 2020

The residential property market is currently full of confidence in Sydney with limited stock levels being the main driver of price growth. If we continue to see a lack of listings, we’ll no doubt benefit from similar price growth that we saw in the second half of 2019, however, my prediction is that we may start to see a larger number of listings from those who have taken the ‘sit back and see’ approach. 

This will have a balancing effect on prices being that supply begins to meet demand. While there are many markets within Sydney and some areas still have an oversupply of apartments for sale and due to settle, the areas I believe will perform best will continue to be the established suburbs where apartment development is minimal, with a scarcity of quality detached housing.

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For more articles exploring the trends, highlights and outlook of the 2019/2020 property markets, click here.