Strong Sydney House Prices Spur Property Bubble Fears
In this story from BBC News, journalist Phil Mercer reports on the recent rapid growth in the Sydney property market, and fears that it is developing into a housing price bubble.
State of the Sydney Market
As Phil Mercer explains in the segment, recent reports suggest Sydney house prices are rising by as much as $500 per day. Modest inner-city terraces can now be expected to fetch upwards of $800,000. But despite the high prices, the buyers keep coming. A three-bedroom Darlington terrace featured in the video, with just a small courtyard and no off-street parking, sold for $892,500, well in excess of Sydney’s median house price.
Real estate agent Scott Aggett describes the current Sydney market as the strongest he has seen in a decade. Scott says that the volume of available listings is down, driving up prices and leading to a very rapid turnover in properties.
Will the Bubble Burst?
Of course, the thing about bubbles is that they eventually burst. So where will the recent growth in Sydney house prices lead?
According the analyst Nigel Stapledon of the University of New South Wales, the trend will eventually be ‘cut short’ as inner-city supply kicks back in. He expects this to happen within the next 12 months to two years. Whether that means that prices will actually drop, or whether growth will simply level off, remains to be seen.
Property Investing in Sydney
Contact Rass Global Investment for professional property investment advice in the Sydney area.