Monday 16 June 2003
Sydney's West & South West Lead the Way Sunday, 15 June, 2003 - Sydney - Australia's leading residential property services group, McGrath Estate Agents and national property information publisher, Australian Property Monitors, today released the latest McGrath APM Index, forecasting the growth of the Sydney property market to December 31, 2003. The results from the McGrath APM Index for the December 2002 quarter confirm that the Sydney property market experienced a moderate slowdown late last year with a less aggressive increase in the growth rate of 2.2% during the December quarter. For the 12 months period from Dec 01 to Dec 02, the Index increased by 9.0%. House prices grew by 10.0% and unit prices grew by 7.8% Looking ahead, assuming no change in interest rates until December 03, the McGrath APM Index forecasts Sydney property prices will increase by an average of 10.0% during the current year (Jan 03 to Dec 03), with key regions of growth expected to be houses in Sydney's West and South West. Louis Christopher, Head of Home Price Guide Research says, "The most recent findings from the McGrath APM Index are very reflective of the current state of the Sydney residential property market. May's auction clearance rates are somewhat down on the levels seen last year, yet not at levels that would suggest a substantial downturn. Recent median prices for the March quarter indicate ongoing strength in the outer regional areas and recent real estate advertising points to some discounting occurring in the inner city apartment market. Going forward, the outer regions should still continue to outperform the market for at least the next 12 months. After that period, I would expect prices to level out in these areas." John McGrath, Chief Executive of McGrath Estate Agents says, "These results indicate that there has been no bursting of a bubble, only a slowdown in growth. Houses in particular continue to show strongest growth throughout Sydney's residential market. The fastest growing regions of late have been in the west and south west regions. This results from these areas coming from a much lower base as well as the development of considerable infrastructure including the M5, making commuting so much easier." Mr. McGrath adds, "Despite patchiness in some areas of metro Sydney, quality properties continue to perform very well and will sustain growth over the next 12 months. Despite a year of global uncertainty, the underlying drivers of a strong property market, low interest rates and confidence in the Australian economy, continue to reflect positively on the market. Rental yields continue to be slightly down, however Sydney residential property is by far the most attractive available asset class, and in my opinion, remains a strong investment." Some Key Findings of the McGrath APM Index: 1. An increase in the growth rate of property prices in the Dec 02 quarter with a 2.2% increase in the Index (measuring houses and units together) to 183.8; however the 12-month increase (Jan 01 to Dec 02) stands at 9.0%. 2. The Index for houses stood at 192.3; up by 2.2% from the Sept 02 quarter, whilst the Index for units was at 171.0; up by 1.6% from the Sept 02 quarter. 3. Sydney's West and South West have led overall price growth with four out of the five fastest growing suburbs being from these regions. For houses, Campbelltown was once again the outstanding suburb, increasing by 27.9% for the 12 months. Blacktown and Liverpool recorded the next fastest growth rates of 22.8% and 20.1% respectively for the same period. Campbelltown units recorded the fastest growth rate during the quarter with an 8.4% increase in the Dec 02 quarter. Liverpool units recorded the next fastest growth rate of 6.1% in the same period. This growth is predominantly due to the relative affordability of units in the West compared to other Sydney areas and the First Home Owners Grant contributing to the affordability of these properties. 4. Sydney metro region showed a slower growth rate with mixed results in suburbs across a number of localities. The weakest sector appears to be inner suburban apartments, with four of the five slowest localities being from this region. Randwick units recorded the slowest growth rate of minus 0.9% for the December quarter. Conversely, growth in the Inner West shows no sign of slowing; Strathfield houses recorded a growth of 5.9% over the December quarter. In Sydney's established regions, growth was not as strong. Mosman units recorded a slight rise of 1.0%. Sydney's Northern Beaches also recorded mixed results. In Dee Why, units recorded a slight fall of minus 0.3%. In the Avalon/Newport region, units increased by 1.7%. 5. Assuming no change in interest rates to Dec 31, 2003, the Index forecasts Sydney property prices to increase by 10.9% for houses and 9.1% for units. The previous McGrath APM Index quarterly update predicated price movements with the forecasts and actuals reported below: December 2002 Forecast Composite 182.3 Houses 188.0 Units 172.9 December 2002 Actuals Composite 183.8 Houses 192.3 Units 171.0 Fastest Growing Localities - Sept 02 - Dec 02 Houses
1. Campbelltown - 6.3%
2. Strathfield - 5.9%
3. Blacktown - 5.2%
4. Liverpool - 4.7%
5. Bankstown - 2.7% Units
1. Campbelltown - 8.4%
2. Liverpool - 6.1%
3. Bankstown - 6.0%
4. Parramatta - 5.3%
5. Cronulla - 3.7% The McGrath APM Index, initially launched in December 2001, was the first analysis that incorporated every significant variable affecting Sydney residential property and is a partnership between McGrath and the leading industry information service, Australian Property Monitors. The McGrath APM Index will be distributed to McGrath and Australia Property Monitor's clients and will be accessible to the public through the www.mcgrath.com.au and www.homepriceguide.com.au websites. - end - For further media information, please contact: Terri Sissian - McGrath Estate Agents on (02) 9386 3342 Louis Christopher - Australian Property Monitors on (02) 9339 8200
