Investors should not be spooked by fears that rising property values in Sydney have locked them out of the market, according to the Real Estate Institute of NSW (REINSW), whose data shows that there are several sought--after Sydney suburbs where prices actually fell in 2007.
REINSW president Steve Martin said alarmist media stories prompt people to “feed into a misconception that buying a property has become too hard”.
“People get scared off when all they ever read about is how much interest rates are rising and are likely to rise,” Martin said.
“But with rents on the increase and the shortage of rental properties meaning that they’ll continue to rise for some time to come, buying a home makes more economic sense than ever.”
In the long term, Sydney property prices will continue to go up, Martin said, but added that “golden opportunities” are currently available in many areas, particularly in the apartment market.
In the recently released 2008 Domain Property Guide, there is proof that unit prices have fallen in many of the outer Sydney fringe suburbs, and also in some areas closer to the CBD.
Lifestyle suburbs such as Cronulla and Sans Souci in the south, Manly in the north and St Peters in the inner west, for example, all experienced declining average apartment prices in 2007.
Apartment prices in St Peters, which is less than 8km from Martin Place in central Sydney, plunged by 19% to a median $355,000 in 2007, while in the beachside suburb of Cronulla they fell 1% to a median $394,000.
In North Manly, the average price for an apartment was $420,000 in 2006, but in 2007 it dropped sharply, falling 15% to $356,000.