After a slow start to the year one leading industry pundit is expecting the Australian property market to gather momentum this autumn, with solid price growth on the horizon for almost all major residential markets.
John McGrath, chief executive of McGrath Estate Agents, said there were many more positive than negative drivers shaping the Australian property market, most particularly an improving economic climate, strong population growth and a severe housing shortage.
Huge offshore demand for Australian commodities placed Australia’s economy in one of the best positions internationally, Mr McGrath said, while population growth was among the highest of any OECD country, which combined with low building approvals, would continue to apply pressure on housing.
“Population growth and the undersupply have led to low vacancy rates and high rents with average yields of 4.5 to five per cent in prime metro locations,” he said.
Mr McGrath said higher interest rates and an overhang of mortgagee sales were the only negative influences on the market.
Investors could expect modest city price growth in 2011 with the best results in suburbs close to the beach and within 10km of the CBD, Mr McGrath said, while many regional areas would deliver higher than average price growth.
“As predicted, the spill over effect from strong metropolitan activity has gained traction in some blue ribbon regional areas.
“We’re seeing many city-based investors exploring regional centres for affordable opportunities.”
Mr McGrath predicted more investors to return to the marketplace in 2011, particularly those buying with DIY super funds.
John McGrath’s top Sydney metro picks
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