Plans For Our Growing City
As your local real estate agency, we feel it is our role to keep you abreast of what is happening in the market. When pondering this, two words spring to mind – RED HOT!
We simply cannot get enough properties to cater for demand. All sectors are selling quickly and for very good prices.
Markets such as this make a lot of people nervous about the best plan of attack. Some are keen to get into the market before prices rise even further. Others are tentative about selling their existing property for fear they won’t find something suitable to buy. This is a difficult predicament and, in some cases, they may not find something immediately and forced to rent or find temporary accommodation with family or friends.
On a daily basis we are asked by both buyers and sellers what they should do. Our role isn’t to make decisions for people, but more to share knowledge and experience. We use our longevity in the industry (weathering many booms and busts) and take into consideration local and external factors that are likely to affect property prices now and in the future to give our clients the knowledge they need to make the right decision for themselves.
One such factor that may have an effect on the real estate market over the next 12 months, and importantly the next 20 years, is the NSW Government’s Metropolitan Strategy. With a population forecast to reach 6 billion by 2036, the State Government predicts there will be the need for an additional 770,000 homes by 2036.
At a local level, one of the key directions of the Metropolitan Strategy is to provide 30,000 new homes in the Inner West. The focus will be in and around existing strategic and local centres while achieving a mix of zones and dwelling forms and improving housing affordability.
The target by 2031 in the Inner West will be approximately 1,100 new dwellings per annum.
With plans already in progress to commence building a series of new apartment blocks throughout the area, many due for completion within the next 12 months, unit buyers will have a lot more choice. More stock may see unit prices temporarily plateau.
Conversely, land becomes highly sought after. Developers seek it for medium density housing development. Buyers want a house and land to cater to their expanding families. Consequently demand and competition sees house prices increase.
While this is a broad generalisation, it points out how astute buyers and sellers should not only read what is happening in the marketplace now but also factors that will affect the long term value of their property in the future.
Bearing this in mind, one word of advice we may give to people at present is if they dream of moving from a unit to a house in the not too distant future, perhaps they should consider doing so sooner rather than later. Unit prices at present are achieving very good results and selling relatively quickly.
House prices, while some may consider expensive at present, are more than likely only going to increase further. Just a few things to consider...
If you like a more personalised discussion about your situation please contact our office.
SYDNEY’S FUTURE AS THE COUNTRY’S ECONOMIC POWERHOUSE
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As per our main newsletter article this month, it is clear the State Government is aware of the problems facing Sydney’s future including sustaining population growth, low levels of housing construction and high property prices. Interestingly, a report released this month by forecasters BIS Shrapnel for the Urban Taskforce developers’ lobby has revealed that it is these factors that could see Melbourne become Australia’s economic powerhouse by 2037.
The report, titled Going Nowhere, claims that Sydney is slipping behind in terms of its economy, population and ability to attract investment. Victoria on the other hand is building new homes at twice the rate of NSW and attracting immigrants at record numbers.
By 2020, the report found that based on current trends, NSW could enter a downward spiral as it faces the challenges of an ageing population, poor housing affordability, lower immigration and less workers.
Poor planning systems and high development levies have led to a fall in home ownership and rental stress in NSW. An article in the Australian this week claims that government charges and infrastructure costs for broad hectare developments in Sydney in 2007 were nearly $100,000, while in Melbourne it was under $30,000 and in Brisbane $43,000.
It is the lack of housing supply that fundamentally drives the NSW economy.
"In New South Wales, the economy comes back to construction, because at the end of the day we're not blessed with the resources of Western Australia or Queensland," said Aaron Gadiel from Urban Taskforce.
"What drives our economy is the activities of people. Housing people is at the fulcrum of it all. Not only does housing provide jobs itself, it also gives us the opportunity to house and attract people to our economy who can make a difference."
According to NSW Planning Minister Tony Kelly a report is due to be released shortly that will examine Sydney’s land supply. We’ll keep you posted.