John McGrath, CEO, McGrath Estate Agents
I believe 2011 is set to be a turnaround year. In my opinion the market will gather more strength in the first half of the year particularly in metropolitan markets with a spill-over effect into regional markets in the second half of the calendar year. Sydney property values are now stabilising as interest rates continue to rise and we have seen some softening of prices over Winter. We experienced an upsurge in listing volumes in October and November due to the late Spring season (courtesy of the extended Federal Election) with auction clearance rates hovering between 50 - 60%. While this is down from the 70 - 80%
clearance rates we saw earlier in the year, it’s still reasonably average for the market over the long term.
Sydney, Melbourne and Canberra continue to lead the way in what I anticipate will be a strong recovery period in 2011. These markets, being the key national markets economically and politically, reflect Australia’s strong financial position. Sydney is like BHP, the big blue-chip within Australian real estate that generally outperforms as markets improve.
Rising rents, a national housing shortage and an improving economy are the key drivers of the market. In Sydney, demand is strongest from upgraders and investors and I’m expecting prices to continue rising over the next three years – possibly by 8% - 10% in 2011, especially close to the CBD and the beaches.