Building and economic forecasters BIS Shrapnel are in the news having predicted a further 20% increase in Sydney prices over the next two years. This is on the back of gains over the last 3 years of around 35% underwritten by the ongoing shortage of Sydney property built up over 10 years of below average construction.
They are also forecasting significant uplift in values in the Brisbane and South East Queensland market generally over the next few years. We have been watching that market with increasing interest for a while now and we’ll keep you posted as markets shift between stage of cycle phases (see comments on the Sydney rental market below).
Some property owners view the buoyant Sydney market as an opportunity to sell and realise the gains made throughout the Sydney metro area in recent times. While we’re not suggesting this is the best way to go (remembering our old adage “always buy – never sell”), it is interesting to see the prices properties are now attracting.
Apartments in The Avenue, Mount Druitt which originally sold at prices ranging from $245,000 to $275,000 for a typical two bedroom, two bathroom, are now changing hands in the mid $300,000’s with a top sale price of $355,000. A slightly smaller apartment in that building is on the market at $349,000 with a tenant in place at $350 per week. Brand new apartments in Mount Druitt are now selling at upwards of $385,000.
Even more impressively, The Minchinbury Winery development in Barossa Drive, Minchinbury has had two “townhouse style” apartments sell at $556,500 and $489,000. These were originally purchased (with settlements a mere 16 months ago) at $455,000 and $375,000 respectively.
It may be a good time to review your portfolio and start thinking about your next move.
UPDATE: Skye Apartments, Gosford
The Stage 1 release of this project was very quickly taken up by investors seeking capital growth opportunities. We have recently visited the site and met with the developer for a progress briefing. Excavation has commenced and the basement level should be reached in the next week or so. Completion of stage one is estimated (at this early stage) to occur in early 2016.
Bankers burst the bubble bubble
The Australian Banker’s Association (ABA) have released a new report which concludes a price bubble does not exist in Australian residential property markets. In itself a reasonable conclusion (in our view) and based on solid and well presented data and evidence. The interesting part is the vitriolic rage in response to the media’s coverage of the report. “No bubble? How dare you”, they rant from the digital rooftops.
There is so much misinformation AND disinformation out there these days it seems the truth isn’t going to get in the way of a good conspiracy theory anytime soon.
We have long argued that property price bubbles are perfectly normal…just misunderstood. Here’s a piece we published a few years ago on the subject:
Yes Virginia, there is a property bubble
An ongoing collection of thoughts, opinions, observations and recommendations by long time property analyst and commentator Brett Johnson.