Sydney property investor predictions for 2014

2014 predictions

With the current talk about a property boom, it’s easy to believe that property investment is a golden ticket to Easy Street. But you shouldn’t jump in blindly just because the word is that the market is hot. Good investment still requires good research, and in the new year good research and careful decision making might just save you from the disappointment of an underperforming investment.

The recent perception of a property boom hinges upon strong growth over the latter part of 2013 – in Sydney and Perth in particular. National aggregate figures are being boosted by booms in these cities, with property values in Brisbane, the Gold Coast and Adelaide being much flatter, and Melbourne experiencing considerable fluctuation.

Sydney stays strongest

The good news for Sydney investors is that the Sydney market remains the strongest in the country, having recorded an impressive 12.5 per cent rise in the six months to December 2013. Median property prices in Sydney in December 2013 were just a little short of $730,000, up from $648,000 in June, according to RP Data.

The flipside of this growth is that there’s likely a correction to Sydney property prices coming in 2014. The Sydney market’s growth over the last six months is not sustainable over the longer term, so can be expected to either plateau or actually drop in the new year. Buyers looking for long-term growth may be better off waiting until prices correct a little, rather than buying in a rapidly inflating market.

Study your suburbs

Within Sydney, it’s also important in be selective about where you buy, depending on your investment strategy and goals. For high rental yields relative to property values, Mt Druitt, Leumeah, Macquarie Fields, Ingleburn, Auburn and Blacktown are all performing strongly.

Investors looking for long-term growth rather than immediate rental return should look to the eastern suburbs and closer to the CBD, where property values, driven by consistent demand, can be expected to remain strong over the long term.

Newcomers should look to the outer west

For those just wishing to get a foot in the door rather than worrying about returns in the immediate term, the new suburbs being built in the outer western suburbs provide plenty of opportunity. The large-scale influx of new properties in these areas means, however, that property values are likely to remain low for some time. This disadvantage will need to be balanced carefully against the advantage of just being able to get that first break.

 

For more information and expert advice on property investment, management and renting, contact K.G. Hurst today.

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