Sydney’s top-end luxury property market will be buoyed by growing confidence, rising prices and improved supply with records set to tumble in the best-performing postcodes, according to national property valuer Herron Todd White (HTW).
A record price of $25 million set two years ago is expected to be topped at a forthcoming auction for 1473-square metres of waterfront land in Mosman, about eight kilometres north-east of Sydney’s central business district (CBD).
Prestige markets will also continue to be boosted by construction projects in Circular Quay and additional development of Barangaroo, an urban renewal project on the western waterfront of the CBD.
More than 20 trophy houses are listed for sale in Point Piper, Vaucluse, Bellevue Hill, Darling Point and Elizabeth Bay with asking prices above $15 million
Sydney had seven of the top 10 performing metropolitan suburbs with the inner-west, Baulkham Hills and Hawkesbury region posting gains of nearly 9 per cent last year, according to CoreLogic analysis.
“Overall, we expect new listings to increase in the first half of this year, which should see price growth begin to moderate,” said Shaun Thomas, HTW’s director of prestige residential property.
Recovery in Melbourne
Melbourne is expected to make a strong recovery during the next six months, according to Perron King, a director at HTW in Melbourne.
But there are continuing concerns about settlement for off-the-plan apartments following controversy about flammable materials and poor construction standards.
Completion of new developments in city fringe suburbs including South Yarra, Richmond, St Kilda and Collingwood are contributing to concerns about over-supply, particularly if demand is not as strong as expected.
“2020 will be more about steady growth rather than a boom,” Mr King said. “Clearance rates are strong and we may see a slight increase in prices as people come into the market.”
David Notley, a Brisbane-based HTW director, is bullish about Brisbane’s prospects because of rising migration from other states, particularly NSW, infrastructure projects driving economic growth and oversupply of investor units being absorbed.
“The closer you buy to Brisbane’s CBD, the more likely you see capital gains,” Mr Notley said. “Buying a detached home within a reasonable proximity of the city will be the surest approach this year.”
In Adelaide, market sectors to watch will be the middle ring $400,000 to $600,000, entry-level and prestige market of $3 million-plus.
“The middle ring provides affordability for first home buyers and also a price point for cashed-up investors,” the report concludes. Key growth suburbs include Felixstow, Seaton and Pasadena.
Perth, Canberra, Hobart
Improving prospects for the resources sector will contribute to increasing sales and rising prices around Perth, the report states.
“By the end of the year, we should have a decent indication of the scale this cycle will be,” it states.
Demand for Canberra’s established suburbs is expected to remain strong, particularly in the inner south and inner north suburbs of Ainslie and Yarralumla.
“We anticipate a slightly slow start to 2020, which is not uncommon, followed by a steady year with some growth in all sectors except for the unit market,” the report concludes.
Hobart, which was the nation’s star performer last year, is expected to continue its strong performance.
“Strength in the local economy, population growth, near nil vacancy rates in the rental market and ongoing housing shortages will deliver continued growth,” it states. “We remain positive about pricing.”
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