Trends we can expect to see in real estate

Sydney

In Sydney, Tanya Barrett from Ray White Lower North Shore expects social and demographic trends to underpin a strong year ahead in property.

“Across the board I am seeing savvy, informed buyers who consider location, surrounding facilities, capital growth, rental returns and also tenant demand when choosing a property.

“While there are many investors, young singles, couples and families in the market, demand from downsizers is especially strong and many of them are happy to secure a property now and keep it as an investment until they downsize in the next three to five years.

“I am finding it is more and more common for a buyer to be part-investor, part–owner-occupier, with many people planning ahead.

“I am also seeing many downsizers make the move at a much earlier point than they were maybe five years ago. It is not uncommon now to see buyers who are in their late 40s or early 50s doing their first downsize. Generally they are looking for a relatively large living space, combined with a convenient location and reduced home maintenance.”

Barrett says homeowners are looking for well-positioned properties in locations with a community feel.

“Parks and the community feel are a huge driver. Many buyers look for areas where sports grounds, parks and the beach or harbour are highly accessible. If amenities like these are only moments away, it is easy to use your surrounds as your backyard.”

Barrett expects the inner Sydney market to remain challenging for first-home buyers.

“On the lower north shore, first-home buyers on a budget are noticeably absent. A combination of having to compete against the high number of investors and the basic entry-level price being relatively high has led to many first-home buyers to choosing to stay at home longer to save more money or choosing to buy further afield.”

She predicts demand for apartments will continue to be strong throughout 2015.

“I am seeing a lot of country buyers looking for a Sydney base. Many have kids starting uni and are looking to secure two-to-three–bedroom apartments where the kids can live and mum and dad can visit. Generally I am finding these buyers favour older-style, boutique blocks with no lifts and leafy surrounds.

“There is also strong demand for pet-friendly apartments and townhouses. With the price of inner-city semis and freestanding houses out of reach for many, more people are looking to create a long-term home in these smaller dwellings. This often means both kids and pets need to be accommodated.”

Melbourne

In Melbourne, Leon Gouzenfiter from Gary Peer and Associates in the inner south also expects 2015 to be a positive year for property.

“2014 was an unexpectedly strong year. Locally, we saw prices increase by as much as 10–15 per cent across many segments of the market.

“All in all I am expecting another strong year ahead where prices will at worst ‘hold up’ but are more likely to increase further. The insatiable appetite for well-positioned parcels of land was the highlight last year and will continue to put pressure on prices throughout 2015. I would expect further growth on land this year although perhaps not as dramatic as in the last 12 months.”

Gouzenfiter expects current economic conditions will contribute to ongoing growth.

“Current market conditions have combined to create almost a ‘perfect storm’ in terms of demand and price growth. Historically low interest rates and the likelihood of further rate cuts are combining with lower than usual stock levels in Melbourne. I predict a competitive autumn and winter market.”

Gouzenfiter notes the recent performance of Melbourne’s prestige market.

“The prestige end of the market was very buoyant through spring 2014 and it is evident that these buyers are prepared to fight it out for quality listings.

“I am also seeing some single-level properties outperforming two- and three-storey properties as baby boomers and empty-nesters look to scale down from the family home.”

Gouzenfiter says an emerging trend is the willingness of family buyers to consider a wider range of localities than in the past.

“Young families looking to find the ‘family home’ are paying a premium for properties with good access to public transport and certain schools, often at the expense of the size, style and suburb the property is located in. Many buyers today are quite flexible and consider purchasing across a wider range of suburbs.”

In both Melbourne and Sydney, 2015 looks like being a hot year for the property market. Those in the know predict economic conditions and social trends to underpin strong growth over the next 12 months.