Look what’s happening in our property markets – Sydney

This is the second in a series about the current state of play in each of our major capital cities based on Australian Property Monitors January housing market report.

Yesterday I gave the national property market overview, today I feature the Sydney  property market.  I will cover the other major states in future blogs.

Here’s what Dr. Andrew Wilson of APM had to say about what’s happening in the Harbour City:

Sydney was the standout performer amongst the capital city markets in 2013 with annual prices growth set to exceed the 12 percent recorded in 2009 – which would be the best result in a decade.

Sydney’s inner west, upper north shore and west suburban regions recorded strong prices growth of up to 20 percent over the year, with the inner west median house price now tracking above $1 million and the upper north shore close behind it.

Record levels of investor activity were a significant factor in Sydney house price growth in 2013, although first home buyer activity and the prestige market remained relatively flat.

The Sydney housing market is set for a solid start to 2014, as confidence and enthusiasm particularly amongst mid-price range inner and middle-ring suburban buyers remains high. However, buyer activity and prices growth should begin to moderate by mid-year as the effect of falling affordability and a deteriorating economy impact the housing market.

Sharply falling yields, rising vacancy rates and a rising share market should act to moderate investor activity.

Despite the prospect of an early year cut in interest rates, Sydney houses prices will rise by between 5 and 7 percent over 2014 with most of that increase occurring in the first half of the year.

As you can see from the following graphics the markets are very fragmented, with certain regions exhibiting significantly more growth than others over the last year…

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Tomorrow I’ll cover the Melbourne property market.