Sydney's residential property market is continuing to experience strong demand with sales levels and pricing remaining solid across the Harbour City – and the good news is that the outlook for the remainder of 2003 is very positive. Prices across the entire market are likely to remain strong as there are still high levels of unfulfilled demand and continuing record low mortgage rates.2003 looks like being another good year for residential property. Properties are still currently attracting strong prices and high demand and we expect this to continue for some time.Whilst some market commentators believe the market may have peaked and be ready to head downwards, these predictions are forgetting the strongest fundamentals affecting the market – demand and supply.We are still seeing strong levels of activity and a continuing desire by people to purchase property, and this is matched by continuing low stock levels across the whole market.Low levels of supply have been a factor in the market for some time and our agents are saying the demand exists for them to sell far more properties, if only there was the supporting amount of stock available there for them to do it.Laing+Simmons have recorded several auctions in recent months across all areas of Sydney with clearance rates of well over 60%. Drummoyne and Edensor Park in the and Maroubra in the South recorded 67 clearances, while Bondi Junction, Paddington and Bondi Beach in Sydney’s east recorded 71, 83 and 86% clearance rates respectively.Current record low interest rates are proving a major catalyst to the residential property market, with both owner-occupiers and investors finding the rates attractive.Financial institutions proving very willing to support investment in property, allowing more people to commit to purchasing housing.Interest rates are a very large factor in demand and their continuing low levels have helped produce conditions where housing affordability is above the long-term average.There is still a strong desire by people to purchase in all areas across Sydney as long as properties are realistically priced.Investors in residential property are continuing to experience strong returns in capital appreciation as the strong economy and low interest rates continue to make property a good investment for all Australians.Fears of a prospective oversupply of apartments in Sydney and particularly in areas adjacent to the CBD are being partially counter-balanced by the housing requirements of more 1000 people migrating to Sydney every week. People are still attracted by well-designed apartments in good locations, though medium quality dwellings in some market areas are experiencing strong competition.
Leanne Pilkington is General Manager of Laing+Simmons.*
