Real estate mogul John McGrath predicts southeast Queensland is about to become the nation’s property hotspot. Picture: Renee Nowytarger Source: News Limited
SYDNEY’S blistering housing market will ease over the coming year with prices likely to grow a still-solid 5 per cent to 10 per cent, while southeast Queensland will finally see a surge in prices overtaking the growth rates of its southern neighbours, according to real estate agent John McGrath.
“It won’t be a correction, but a slowdown,” the McGrath Estate Agents chief executive said of the Sydney housing market.
The ascendance of the prestige market, re-emergence of first-home buyers, interest from Indian investors and continued activity from Chinese buyers would be among the big trends in the year ahead, Mr McGrath said.
In Sydney, the historic CBD harbourfront precinct at The Rocks and adjoining Millers Point was Mr McGrath’s top pick for price growth. The inner-west’s Camperdown-Erskinville-Newtown triangle would also continue to deliver, and he believed Botany and Mascot, near the airport, would transform from industrial to residential, fast becoming fashionable. PROJECT APARTMENT: Get our new digital guide to investing in units
The 2014 McGrath Report, released exclusively to The Australian, tips Brisbane’s middle-ring suburbs of Indooroopilly, Carindale and Hendra as likely to see the best price rises. John McGrath’s Top Picks
Mr McGrath forecast housing prices in Brisbane would rise 20 per cent or more this cycle, over the next two years. “If you had $1 million, there is nowhere but southeast Queensland that could compete for growth over the next three years,’’ he said, noting that the hard-hit Gold Coast and Sunshine Coast markets were also beginning to rebound. Melbourne’s house price growth was likely to trail that of Sydney, but only by a small margin. In the ACT, the report puts Ainslie, Turner and newly developed Crace/Franklin at the forefront of price growth.
Mr McGrath said the top and bottom ends of the housing market would be the most active in the next year, particularly homes priced at more than $2m.
In Sydney, 259 homes sold at more than $5m in the 2014 financial year, an increase of 13 per cent, while 80 homes sold at more than $3m each in Brisbane, a rise of 36 per cent on the previous year.
“Over the last four years there has been relatively slow growth in the top end, and it was hardest-hit during the GFC,” Mr McGrath said.
The improving economy and sharemarket and interest from expats would see buyers “snapping up what they perceive as bargains”, he said. While there was offshore interest, most of the top-end demand was from local buyers, he noted.
First-home buyers — currently at historically low levels — would return on the back of pent-up demand, record low interest rates and spiralling rents. “It’s hard for a first-home buyer buying at Bondi or Paddington (in Sydney’s east), but if you are a little bit creative and look at Tempe or Brighton-Le-Sands or somewhere in the more affordable belt, there are opportunities,” Mr McGrath said.
While Chinese and Chinese-Australian buyers were a force in the market and would remain so, Australia had 450,000 people of Indian heritage, with India the biggest source of permanent migrants to Australia at 20 per cent, the report said. “It has been less documented than the Chinese, but I think it (Indian buyers) will be the next wave,” Mr McGrath said.
