The real estate market in Sydney is recovering from the burst and many did not see this coming. According to CoreLogic’s statistics Sydney’s median home value has increased by 5% over three months to 31st October 2019. In comparison to the annual basis, Sydney’s median home value is still down 2.5% and 10% from its peak two years ago.

 

Sydney’s Analyst, Louis Christopher predicts, in his Housing Boom and Bust report, continued growth in Sydney’s median home value of 4% to 16% in 2020. The few potential scenarios forecasted by Christopher for 2020 include:

 

  1. A growth of 10% to 14 %
  • RBA cash rates remain unchanged
  • Australian economy recovering
  • No Australian Prudential Regulatory Authority (APRA) involvement until late 2020

 

 

  1. A growth of 11% to 16%
  • Assuming a 0.50% cut to RBA cash rates
  • Stability in global trade wars
  • Australian Economy is stable
  • No APRA involvement

 

 

  1. A growth of 4% to 8%
  • RBA cash rates remain unchanged
  • Australian economy recovering
  • No APRA involvement until early 2020

 

  1. A growth of 0% to 4%
  • RBA cash rate drops to 0.4% by the end of 2020
  • Trade wars escalate = weakening global economy

 

 

Also, NAB’s Hedonic House Price Forecast predicts moderate growth in Sydney’s median house value of 7% and a unit value of 4% over the period of 2020.

 

Exurbs Analysis

The rise of ‘Exurbs’ is forecasted as the next hot spots for property investment. Exurbs are areas outside or on the outskirts of Sydney city’s metropolitan area. (Full stop to make it flow more) Exurbs are self-sufficient with the population, infrastructure, and amenities. Attractive exurbs include Box Hill in the North West of Sydney, Oran Park, and Menangle located in South West of Sydney. All these exurbs have reasonable commute times to Sydney’s CBD and significant population growth.

 

 

Crow’s Nest Analysis

Crow’s Nest presents investment potential. Primarily, because of Crow’s Nest rail infrastructure in 2024, the multi-million refurbishment of Woolworths and the existing vibrant cafes, restaurants, and bars. Moreover, the nightlife in Crow’s Nest is booming following the recent lift in Sydney’s lockout laws.

 

Auburn Analysis

Lastly, Auburn is another attractive suburb for property investment. Auburn is a 30-minute train ride from Sydney’s CBD and is home to some popular local cafes, restaurants, and open spaces, including the Auburn Botanical Garden. The Cumberland Council, under the Auburn Residential Strategy, is rezoning Auburn for potential developments to accommodate the rise in residential growth. Thus, making Auburn a possible suburb for Capital Gain and Rental Income.

 

If you want to broaden your knowledge on the Australian property market then read our breakdown of Unlisted fund Charter Hall or AREIT market mover Goodman Group (GMG).

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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Associate of YIG, Thomas He

 

 

 

 

Published by Thomas He

Student studying Bachelor of Property Economics

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