Despite increasing commentary that Sydney's property market is facing a price correction, one leading analyst predicts another year of stellar growth.
Louis Christopher, managing director of SQM Research, said Sydney “is still looking strong”.
“Over recent summers (and including this one), we have been getting the usual commentary from the usual suspects stating the market is about to slow down, is slowing down, etc,” he said.
“It is increasingly feeling like the boy who cried wolf. Sooner or later, they will be right – but right now, is a slowdown currently happening in Sydney? Hardly.”
Mr Christopher conceded that a slowdown was inevitable, but doesn’t anticipate it any time soon – particularly if interest rates drop again in 2015.
“The market cannot keep growing at a rate of 15 per cent forever. Our forecast for this current financial year was 8-12 per cent, and I see nothing in the market to suggest it will be below that range. If the rate cut comes, it will be yet another bull market for Sydney for the full calendar year.”
Mr Christopher said he anticipates clearance rates will “rise from the closing levels of the high 60s in December” and “will most likely open in the early- to mid-70s”.
Turning his attention to Melbourne, Mr Christopher said concerns about inner-ring oversupply were warranted, but that city-wide vacancy rates may have peaked.
Mr Christopher also said the Darwin market is in “a full-blown slump”.
“The negativity going on in Darwin has been getting worse,” he said. “Vacancy rates have continued to rise over summer, rents on our numbers are down 14 per cent and are in a clear downtrend…”
Overall, Mr Christopher said savvy property investors will continue to prosper in 2015.
“For property investors, these are not bad times to operate in, if you do your research and study how each region is moving and what is influencing those movements. The threat of a rapid rise in interest rates now seems remote. Of course, the threat of higher unemployment is there, but that’s where a study of the local market would help.”