The key points of our outlook for Australia this year included the following:
- having been a relative under-performer since 2004, Sydney would be the Australian property market to continue leading the property recovery through 2014, driven by very strong population growth;
- the fundamentals of the Sydney property markets and economy are exceptionally strong and comparatively much stronger than elsewhere in Australia;
- the recovery would be predominantly an investor-led phenomenon, with other sectors of the market (e.g. upgraders) to follow;
- first-time buyers continue to struggle to get on to the housing ladder in Sydney; and
- a strong pick-up in retail sales and certain other Australian economic data is expected.
We also offered some cautionary notes, which I'll consider in a little more detail momentarily.
APM chart pack
- that population growth has indeed been a strong driver of the Sydney market;
- Sydney's property markets are the strongest performers of the capital cities at present;
- retail trade in New South Wales is booming in response to low interest rates;
- economic growth in NSW is on the rise;
- Sydney comfortably led annual jobs growth in Australia in the year to January 2014; and
- NSW is by far and way the most fertile state for investor activity.
- while the inner west of Sydney was our favourite sector of the market in years gone by, the phenomenal 3-4 year price growth in that sector led us to believe that the inner west had "done its dash";
- caution! Sydney is entering the first phase of a construction boom, and this buyers should be very wary of those sectors of the market where a lot of new supply is coming online (principally, within the inner south, but also in certain other hubs)
- as a laggard in this market cycle, our "ones to watch for 2014, include a number of key suburbs to the north of the harbour bridge, in particular those with key transport links to the city via Sydney ferried and the north shore train line."
Source: APM, Domain