TIME TO BUY?

In a Sydney property market environment where more and more apartment buildings are being constructed and banks tightening their lending standards, any investor would naturally be wary about making a purchase.

AMP Capital chief economist Dr Shane Oliver suggests to property investors to sell “where there are the most cranes”. But what of suburbs that don’t have many cranes?

According to the latest Property Outlook from realestate.com.au, Sydney’s eastern suburbs have seen the lowest drop in demand and continue to perform relatively well.

Bellevue Hill, Woollahra, Vaucluse, Dover Heights, Bondi and Bondi Beach are still recording a net positive price growth in the past 12 months for houses.

Even Mosman, Cremorne Point, Neutral Bay are recording a net positive price growth in the past 12 months for houses.

It is not rocket science that where local council planning policies don’t envisage cranes building apartment high rises and there is an increase in demand for upper market real estate from the growing numbers of Significant Investor Visa (“SIV”) immigrants in NSW, prices are very likely to remain buoyant.

The latest statistics from the Department of Home Affairs for the 17/18 financial year shows that 88.2% of SIV applications come from China and that 87% of SIVs are granted to the Chinese since the inception of the SIV program.

There is the old adage, “buy low sell high”. In a cooling market, purchasers have more choices and less competition at good prices. No purchaser can precisely pin point the bottom of a cooling market. Serious consideration should be given to purchasing at the right suburbs while the window of opportunity is still open. This is especially true for purchasers not relying heavily on loans to fund their purchase while other competing purchasers relying on a higher leverage need to navigate the tightened bank lending standards.

Even though interest rates will eventually go up again, borrowers for now can enjoy the historically low rates.

It is always a good time to live in a prestige property with a long-term investment horizon, especially in a cooling market. These properties have features that encourages sustainable price growth where there is a static supply and increasing demand. You will also observe that these properties are relatively resilient in a cooling market. Even for investors, rental from upper-market tenants will assist in cruising through market volatility.

If your financial position aligns with current market conditions, it is time to seriously consider taking advantage of the real estate opportunities currently available.