…and that certainly includes the Northern Beaches region, says Richard Sheppard
For those readers that can remember back one year ago to our first property column and market update, you will recall that we forecast strong to very strong growth for the Northern Beaches property market. Thankfully, we can now report that this prediction was spot on, thanks mostly to record levels of housing demand and very low levels of supply.
Some sections of the Northern Beaches property market have showed growth of up to 18 per cent (or $110,000) in six months. For example, a few of the one and two bedroom units at “The Village, Balgowlah”, which inSynergy recommended to nearly 40 of its clients about 12-18 months ago. Needless to say these investors were extremely happy with the outcome!
So where to now after a good run of growth? With the housing shortage continuing to increase, the only way for residential property in Sydney is up.
The ANZ Economics Housing Update for April 2010 indicates that the current housing shortage figures are now higher than they have ever been for more than 24 years at around 240,000 houses, and Sydney’s housing shortage has been the highest out of all the Australian capital cities at 99,700. This is more than twice the next closest of Victoria which stands at 39,700.
In their Residential Property Prospects 2010 annual report, BIS Shrapnel forecast Sydney to have one of the highest growth rates in Australia with 20 per cent growth expected in the next three years.
Historically, BIS Shrapnel are very reliable yet quite conservative, and blue chip strong regions will outperform the general Sydney market. We believe therefore that most of the Northern Beaches suburbs are highly likely to grow by around 7 to 11 per cent per annum over the next three to five years.
“Northern Beaches property is tipped to grow by 7 to 11 per cent per annum for the next three to five years” Both ANZ Economics and BIS Shrapnel generally dismiss any talk of a housing bubble, noting that the housing fundamentals are very strong, with the Australian economy generally outperforming the developed world.
Overall, the fundamentals for keeping strong pressure on house price growth, especially in Sydney and strong property markets like the Northern Beaches are all working in our favour – these fundamentals include:
- increased employment levels
- an increase in critical housing shortage strong demand momentum
- growth in investor, upgrader and offshore buyers
Richard Sheppard is the Managing Director of inSynergy Property and Finance Solutions. Located in Brookvale, inSynergy provides property investment advice, property market research and specialised mortgage broking services to help every day Australians achieve better returns with lower risk from property. inSynergy Property and Finance Solutions 1300 308 808 www.insynergy.net.au