One of Australia’s leading economists has claimed growth of unit prices in Sydney will overtake growth of house prices, and Sydney’s market will stay Australia’s strongest.
Dr Andrew Wilson, chief economist at My Housing Market and previous chief economist at Domain, said that Sydney has a strong property market in its future, with growth of unit prices forecast to surpass growth of house prices.
Speaking at the launch of the Marsden Central development, Dr Wilson said that various factors all point to the strength of the Sydney market, such as the confirmation of record levels of migration, its strong economy, lifestyle offerings and high levels of demand from first home buyers.
Dr Wilson said the demand for units will keep growing, rather than decline, as the latest auction clearance rates place units outperforming houses.
Furthermore, he said Sydney’s tightening rental market is currently 30 per cent higher than Melbourne, and Sydney houses and units are at rent parity with each other at $550 per week.
In particular, Dr Wilson highlighted western Sydney as a capital growth area for units, while outer suburban demand is also rising, reflecting affordability and lifestyle advantages.
Western Sydney has also various development projects in the pipeline, with numerous commitments from local, state and federal governments, particularly to transport, which includes Badgerys Creek airport and the development of Parramatta to become Sydney’s second CBD.
Previously, Chris Gray, founder and CEO of Your Empire has claimed units are a better investment than houses.
Currently, Mr Gray said property in popular suburbs such as Bondi Beach or St Kilda usually mean it is harder to find tenants, as people find it harder to pay for rent in those popular areas.
“The rental [return for houses] might be around 2 to 3 per cent ($1,100 – $1,600 per week), whereas buying two units at $1.4 million or three units at $900k might get you 3 to 5 per cent ($1,600 – $2,600 per week),” he said.