Sydney’s higher end of the property market is beginning to gather pace, new research has shown.
According to RP Data, over the first half of 2013 Sydney has experienced its strongest results from the most expensive 25 per cent of the market. Values across the premium Sydney housing market are up 4.8 per cent compared with a 4.6 per cent rise in values across the broad-middle of the market, and a 3.2 per cent increase in values at the most affordable end of the market.
RP Data research director Tim Lawless said that Sydney’s increase could signal the recovery of higher end markets in capital cities across Australia.
“Sydney’s premium housing market is often the first market to show a shift in premium buyer trends,” he said.
“This trend could mean that investors are targeting higher yielding properties that tend to be in the mid-to-low price ranges.”
Another indicator of an improved prestige market is the share market.
“Often the catalyst for a surge in buyer interest at the top end of the housing market is the share market, where based on the S&P ASX/200 index, shares remain almost 30 per cent below their 2007 peak but have recovered by about 53 per cent since bottoming out in early 2009,” he said.
“The wealth created from improved share portfolio positions is likely to be one of the key drivers of the prestige housing market, as equity profits flow into the housing market.”
The most affordable markets continue to be the best long-term performers, Mr Lawless said.
“Over the past decade, the most affordable quarters of the capital city housing markets have recorded an annual growth rate of 6.5 per cent compared with a 4.6 per cent annual capital gain across the broad-middle priced segment of the housing market, and just 3.5 per cent per annum across the most expensive quarters of capital city housing markets,” he said.