Investors need not worry about the property bubble ‘bursting’ in Sydney, according to RP Data’s Tim Lawless.
Speaking at a Westpac Road Show last week, Mr Lawless said that despite strong conditions in Sydney, and ongoing fears about whether they can continue, the Sydney market is tracking well and nothing is about to burst.
“It’s pretty clear that even though growth rates are pretty strong now, we aren’t in any sort of bubble market,” he said.
Mr Lawless said he expects Sydney to keep outperforming the broader capital city average and that “momentum will continue in the market”. He also pointed to longer term trends to allay fears that Sydney’s price growth is unsustainable.
“Look at the long-term rate of growth for Sydney. In fact, over the past decade, Sydney values have only risen by 2.5 per cent per annum for the past 10 years. That’s lower than inflation.”
Looking at Sydney’s premium housing market, Mr Lawless said the signs were also positive.
“You generally find the premium sector of the marketplace over-performs during the growth phase of the market and shows a larger correction during the correction phase,” he said.
“We’re now seeing that as the marketplace gathers pace, the top 25 per cent of the market is starting to gather momentum. My view on the premium market here in Sydney is that we’re just starting to see the signs now that it is becoming pretty hot out there.”