Easing market conditions mean investors should look outside of Sydney, according to the latest research from property investment consultancy Momentum Wealth.
The report, Property Market Spotlight: Sydney
, looks at key demand and supply indicators and suggests that days of growth in the city are numbered. One of the main contributing factors is the impending apartment oversupply which threatens to push prices down.
With this in mind, the paper advises investors to seek opportunities in other capital cities.
“It can be acutely detrimental to buy at the peak of a market upcycle as the ensuing downturn can have a severe setback on investors’ finances and investment goals,” said Damian Collins, managing director of Momentum Wealth.
“While it’s impossible to predict how much longer Sydney’s upcycle will continue, our research report highlights an easing in several key market indicators suggesting the strongest capital growth in the current upcycle has passed.”
The report examines a number of indicators that show the Sydney market is running out of steam:
- Properties are taking longer to sell
- The volume of properties being sold has dropped
- The number of dwelling approvals has plateaued
These factors come in on top of rising affordability issues plus the aforementioned apartment oversupply – both of which the report says are likely to affect short-to-medium growth prospects.
“While the long-term outlook for the Sydney property market remains positive, the short-to-medium term view isn’t as rosy,” Collins said.
“The research report explains that investors considering the Sydney market are likely to be better off looking at other Australian capital cities that are earlier in their growth cycle, are more affordable and offer higher yields.”
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