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Staff Reporter
Low interest rates might result in more sales this winter, but prices are unlikely to rise, according to the latest John McGrath Market Review.
“Buyer enquiry is up,” said McGrath Estate Agents CEO, John McGrath, in his Market Review - Winter 2012.
“In March, the country’s largest mortgage broker, AFG, had its second biggest month ever in NSW since their index commenced in 2004 with $842 million in new lodgements. While this clearly indicates more buyers are out there, they remain very price sensitive.”
Mr McGrath said while affordability was improving, buyers were holding off on making decisions due to concerns about overseas economic factors, soft business confidence at home and federal political instability.
“Once we see some positive and sustained economic change overseas, I believe our property market will begin a long and slowish recovery over a three to five year timeframe,” Mr McGrath said.
“Markets have a herd mentality and following the crowd gives people a much needed sense of security especially in this time of economic volatility,” he continued.
“Buyers need to be brave – this is exactly the type of market they will look back on and say ‘I wish I’d bought in 2012.’”
Mr McGrath identified regional markets as an investor hot spot in NSW and Qld.
“A significant new trend is city investors looking to regional areas for value and strong yields,” he said.
“Local and city investors are active in areas such as Newcastle, Warners Bay, the Central Coast, the Gold Coast, Port Macquarie and the Blue Mountains.
“Yields of 6-8 per cent (much higher in mining towns) are now common in Australia’s regional areas and better transport links are enabling city investors to explore more affordable markets relatively close to home.”
Sales activity remained sluggish for properties valued above $1 million, he added.
Mr McGrath identified Alexandria, Balmain, Bondi, Palm Beach and Woolahra as his top Sydney metro picks for houses, while Bronte, Drummoyne, Lilyfield, Mosman and Queenscliff took his liking for apartments.
For regional markets, Mr McGrath likes Bowral, Charlestown (Newcastle), Hamilton (Newcastle), Kambah (ACT) and Katoomba for houses, while Lighthouse Beach (Port Macquarie), Palm Beach (Gold Coast), Southport (Gold Coast), Terrigal (Central Coast) and Towradgi (Wollongong) were his preferred locations for apartments.
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