The news is full of interesting data and analysis about the property market at the moment for anyone considering investing in property. For example, according to leading analysts, including the ANZ’s CEO Phillip Chronican, NSW is currently playing a game of “catch up” with the rest of the country after a decade of slow growth between 2003 and 2013. Compared with Western Australia and Queensland, which both experienced record growth thanks to a booming resources sector, NSW and Sydney in particular stagnated during the period and is only now showing signs of a recovery.
This can be seen, for example, in the latest reported unemployment rates in Sydney – now below 5%, compared with over 6% for the rest of the country. The building and construction industries are now working at levels last seen before 2003, and there is a steady influx of immigrants and international students into the city and surrounding areas. With the change in government there has also been positive movement on infrastructure spending – including major highway extensions and upgrades and port expansions – with new government projects expected to pour around $20 billion into the state economy over the next few years. Sydney is solidifying its position as the number one destination in Australia to conduct business, with growth industries in the professional services and IT in particular. All these factors will help to bolster and encourage higher levels of population growth into the future.
Phillip Chronican believes that the recovery of the state can also be seen in the health of the property market at the moment, with Sydney making up for lost time during the past decade.[i] Rather than being an indicator of a property bubble, he believes that higher property prices for residential property investments, especially in the inner city suburbs of Sydney, are signs that the city is once again helping to drive the Australian economy. This also means that in general property prices in Sydney are not over-priced when compared to the rest of the country. This is good news for anyone thinking about investing in property in Sydney, and particularly within the “sweet spot” of inner suburbs close to the city. For people looking at off the plan properties this should also come as welcome news as high population growth and increased business activity means higher demand for homes in and around the city, with increased rents and potentially increased capital growth over the long term.
Property investors should be keeping a close eye on both economic and demographic analysis to help them plan their investment strategies for the future. By understanding the nature of population growth and the impact of government policy on the residential property investment market, investors will be able to take advantage of opportunities that others may miss. Investors are advised to seek professional assistance in developing a practical and sustainable property investment strategy as experts have the research, skills and market experience to help them identify opportunities and build a solid foundation for future wealth.