Housing shortfall to increase Sydney prices by up to 5%, despite interest rate speculation

7 October, 2010

Housing shortfall to increase Sydney prices by up to 5%, despite interest rate speculation


Homes priced between $500,000 and $700,000 are set to enjoy growth of up to 5% by Christmas despite ongoing monetary policy conjecture, according to leading property group Raine & Horne.

Raine & Horne CEO Angus Raine said home owners again dodged the "interest rate bullet" this month, despite many pundits predicting a 25 basis point increase.

“Likewise, it’s nearly impossible to know what the Reserve Bank Board will do in November and December," Mr Raine said.

“So for now, with consumer and jobs confidence relatively high, we are seeing buyer activity for apartments and houses.

“Add Sydney’s chronic housing shortage, which is set to hit 200,000 homes by 2013, and buyer demand will push up prices for homes priced between $500,000 and $700,000 by the middle of December.

While Mr Raine applauded the Reserve Bank Board’s decision to leave interest rates on hold for a fifth straight month, he cautioned that a monetary policy tightening closer to Christmas may impact some markets.

In Sydney’s west, Carlo Mattiuzzo, principal of Raine & Horne Fairfield said he was expecting a mini boom in the run up to the summer break.

“Buyer enquiries have spiked significantly and we expect to see prices jump between 3% and 5% by Christmas,” Mr Mattiuzzo said.

“Fairfield’s affordability is a big attraction with home buyers, and a price tag of $550,000 can land buyers a four bedroom home with a double lock up garage on an 800 sqm property.”

Raine & Horne Maroubra principal Tony Lucas reports that Matraville’s townhouse market has already enjoyed a good run over the past three months.

“In Matraville, older style three-bedroom, two bathroom townhouses are available from $500,000 and are attracting more buyers at open homes,” Mr Lucas said.

“Already increased buyer activity along with a shortage of stock has helped to push up townhouse prices by about 5% over the past three months.

“It’s fair to expect this trend to continue through to Christmas given Matraville’s proximity to the beaches and the city, are major attractions for buyers."

On Sydney’s North Shore, Raine & Horne St Leonards principal John Simpson-Morgan said local apartment prices had increased by between 5% and 10% since the start of 2010.

“There is a shortage of apartments in the $500,000 to $700,000 range, while we have seen a substantial increase in buyers,” he said.

“As a result we expect to see prices continuing to increase for the remainder of 2010.”

To illustrate the spike in buyer activity, Mr Simpson-Morgan cites the example of 20/52 Christie Street, St Leonards.

“This is a two bedroom, two bathroom apartment and attracted 40 groups to the first open home. Earlier in 2010, apartments like this were attracting just 10 groups to open homes.”

Raine & Horne is an iconic Australian property firm, with more than 400 offices worldwide. Also an established Superbrand along with the likes of Qantas, Vegemite, Woolworths and Myer, the company has four distinct property service brands including Raine & Horne Residential, Raine & Horne Commercial, Raine & Horne Financial Services and Raine & Horne Rural.

For further media information contact:

Angus Raine, CEO Raine & Horne on 02 92585422 or 0409 920 697

Anna Truman, Marketing & Communications Co-ordinator on 02 9258 5448