Investors who are too afraid to enter the Sydney market due to the current downturn might be looking at the wrong side of the city.
An analysis by RiskWise Property Research found out that southeast Sydney has relatively avoided huge price falls compared to the Greater Sydney area. In fact, the easter and inner south portions of the city recorded lower declines of only 2.6%, compared to the 5.4% drop across the city.
In a statement, RiskWise CEO Doron Peleg said while the overall market downturn may dampen the enthusiasm of investors, the southeast region of the city still present a lucrative opportunity especially to those looking for long-term capital gains.
"This region in the long term is projected to enjoy strong capital growth, particularly due to its forecast population growth and the ongoing demand for this popular area," Peleg said.
The region, which housed 180,810 in 2011, will need roughly 80,000 more dwellings by 2031 to accommodate a continuously growing population.
This comes as the Greater Sydney Commission eyes to establish a three-city plan over the next 20 years, planning the rise of Eastern Eastern Harbour City, the Central River City and the Western Parkland City.
"This is all good news for those seeking long-term capital growth, but it is important to distinguish between houses and investor apartments," Peleg said.
He explained the region will see a boost in demand for houses and units apt for families. However, areas like Rosebery, Eveleigh, Zetland and Waterloo will suffer an oversupply of units.
"It’s also important to note that the top end of the market has been impacted more than the lower end of the market which has generally been holding well based on CoreLogic data. The bottom line is to think about the long-term and look for areas within the greater South-East area, where the population is likely to swell, infrastructure and the economy to grow and therefore employment to rise.”
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