What’s Happening to Sydney Home Prices?
Pete Wargent finds RP Data’s Daily Home Value Index ‘entertaining as always” and he believes that the capital cities are showing really promising signs, just the information that RP Data yields. In an article for the Street News, he talks about the Sydney property market in high regard.
I think that Wargent has been vindicated in being a loyalist of Sydney. He was the one who stuck his neck out and said “Sydney will do well” even when the pundits felt otherwise. For instance, Wargent talks about the month of June when negative consumer sentiment rising from the Federal Budget had made pundits predict a slide for Sydney.
Sydney has impeccable fundamentals
Wargent, on the contrary, felt that Sydney’s intrinsic economic values/ fundamentals were firmly in place and that it should easily beat any predictions of bust.
Sydney home prices up by 7%
And why is he vindicated- Well! Sydney home prices have recorded more than 7% rise since June (the month when pundits predicted a downturn).
In Wargent’s opinion, Sydney has better credentials than Melbourne to make the right kind of property market impact.
You can read the original article here.
Sydney may offer overall property market growth
Quite like Wargent, I feel that Sydney will offer means for overall growth whereas Melbourne will witness property price escalations restricted to its middle suburbs.
Sudden increase in construction activity can be a double-edged sword
I think Sydney will have to guard itself against market downturns, those that may occur due to completely avoidable reasons. For instance, prices are soaring and all is good but any fast-travelling rumour about a real estate boom may initiate high level activity in the construction sector.
We all know that a busy construction sector will delight one and all but a sudden increase in its activity level will lead to oversupply. What succeeds oversupply? Anybody can answer this- decline in demand thus leading to market downturn.
Do you think high rental yield is driving investors towards Sydney and it may not be such a great thing after all?