Balmain East has topped a list of five Sydney metro suburbs picked for house price growth by a leading real estate company.
In the latest Mcgrath Market Review, Mcgrath Real Estate CEO John McGrath tipped Balmain East as having the top prospects for house price growth, along with the metro suburbs of Hunters Hill, Killara and Palm Beach.
Cammeray, Monterey, Ryde and Sydney CBD were listed as expecting top unit capital growth for the future.
Coogee made the list for both house and unit price growth.
Several regional areas were also suggested for growth, with the Blue Mountains and Newcastle remaining strong. Queensland’s Gold Coast was also picked as a region with an outstanding opportunity for capital growth, provided investors have the capacity to hold the properties for the long term.
Enquiry is already up significantly, according to Mr McGrath.
“The under $1 million market is still the strongest segment but there’s new interest up to $2 million and even beyond in Sydney and Melbourne where higher end buyers weren’t around as much in 2011. While it’s too early to tell whether this new enquiry will translate into sales, it’s logical to think that if enquiry is up and new mortgages are up then we will see a good start to the first quarter.”
“We’re in a state of flux with ongoing uncertainty over the European debt crisis, job losses here at home and the banks signaling that the days of routinely following the Reserve Bank’s moves on interest rates may be over.”
Yet Mr McGrath pointed to a 40 per cent rise in national mortgage sales in January - as reported by Australia’s largest mortgage broker AFG – as a signal that the property market may be improving.
“Fuelling buyer interest are the two interest rate cuts last year and vendors more aligned to the current market,” he continued.
“There’s also a sense among buyers that after waiting it out in 2011, now is the time to buy when lower rates allow greater borrowing power and excellent value remains on offer.
“While this show of confidence is encouraging, there are competitive forces at play. I believe the market won’t have significant price increases until the Europe is resolved and we see further signs of recovery in the US.”
Mr McGrath, whose 44-office company now operates in NSW, the ACT and South East Queensland, said concerns over unemployment, with several big companies announcing job cuts in recent weeks, and the banks’ campaign to separate themselves from the RBA were likely to cause some insecurity among borrowers.
He said residential real estate within 10km of the CBD in Sydney is an excellent choice, and he added that investors might also want to look to South-East Queensland this year.
“We’re already seeing more activity on the Gold Coast, with investors coming from the local area, as well as Sydney, Brisbane and Melbourne.
“Markets like the Gold Coast and Sunshine Coast were significantly oversold during the GFC and depending on the level of mortgage sales over the next 12 months, should have very strong upside when they begin a real recovery either this year or in 2013.”
He added that the Byron Bay region was another market that “we’re cautiously optimistic” about.
“The Ballina bypass is now complete, removing 1,500 trucks and 6,500 cars per day from local streets, according to NSW government figures. This provides excellent scope for property price rises. We’re seeing more buyers particularly in Byron Bay and Ballina, and instead of playing ‘wait and see’ like in 2011, they’re making firm decisions.”