The director of residential at Savills Australia has provided a year-in-review on the market.
Chris Orr, director of residential at Savills, said the year for residential “started off slowly” with a “cautious market coming off the back of a couple of years recording price declines”.
“With a NSW state election in March and subsequent federal election in May, buyers and sellers were in a standoff until results were clear, given the proposal of negative gearing changes that would severely impact the ongoing feasibility for many to invest in real estate,” Mr Orr said.
“After a Liberal win on both fronts, we began to see more confidence in investment and a willingness to transact, which was further encouraged by the APRA changes to both the interest-only loan cap for banks as well as the way banks were assessing borrowing capacities, which increased potential borrowing power for buyers.”
Mr Orr noted that the second half of the year saw “renewed vigor”, inviting the likes of a strong surge in price growth.
“The areas that saw most benefit from these increases were predominantly blue-chip suburbs where there was a clear shortage of detached housing,” he added.
In terms of what to look forward to in 2020, Mr Orr pointed to confidence levels continuing to rise.
“The residential property market is currently full of confidence in Sydney, with limited stock levels being the main driver of price growth,” Mr Orr said.
“If we continue to see a lack of listings, we’ll no doubt benefit from similar price growth that we saw in the second half of 2019; however, my prediction is that we may start to see a larger number of listings from those who have taken the ‘sit back and see’ approach.
“This will have a balancing effect on prices being that supply begins to meet demand.
“While there are many markets within Sydney and some areas still have an oversupply of apartments for sale and due to settle, the areas I believe will perform best will continue to be the established suburbs where apartment development is minimal, with a scarcity of quality detached housing.”