Sydney’s property market has been the best performer over the last few years growing 16.65 in the last 12 months according to RP Data, but there’s more good times ahead…
BIS Shrapnel’s Residential Property Prospects 2014-2017 report forecasts total growth in Sydney property prices to grow a further 14 per cent over the next two years driven by an undersupply of houses and units.
But growth will likely slow down by 2017 as variable mortgage rates are predicted to reach 7 per cent by the end of 2016, putting increasing strain on affordability and slowing demand.
Much of this growth will come on the back of the current strong momentum in the market and continued investor.
However the speed of growth is likely to change when a wave of newly constructed apartments hits the market.
This too shall pass..
BIS Shrapnel explain that a high level of new apartment developments has already started across Sydney, but many are still on the drawing board or yet to be completed.
By the time the majority come on the market for sale, the low interest rate environment will likely have changed and property prices will have become less affordable, dampening demand.
That means means, this time round, just like every previous property cycle, the combination of increased supply and decreased demand should slow growth in property prices. And this is likely to occur in 2017.