Is now the right time to invest in Sydney?
Smart Property Investment teamed up with a top buyer's agent to work out if now is a good time to be investing in the Sydney market.
During a live and exclusive webcast for Smart Property Investment, which you can now access for free here, Pure Property Investment’s founder and director Paul Glossop echoed the views of host and editor Phil Tarrant - it’s the right time to get into any market if the fundamentals of a good investment are there, and you can afford it.
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The Sydney market has now been widely accepted as close to bottoming out, and the nation’s leading economists expect a slow and steady recovery.
During this period, the markets in Sydney which are most concerning to Mr Glossop are house and land packages, particularly those which are in Sydney’s south-west region. A significant portion of the NSW Government’s infrastructure spending in Sydney to date has been directed towards the south-west of Sydney and the north-west corridor.
“Those are the ones which scare me the most,” Mr Glossop said. “People got caught up in the hysteria.”
He noted the house and land packages are often a considerable distance from city centres and infrastructure, because they were built on the “next bastion of available land” on the outskirts of Sydney.
Mr Glossop’s message to investors is consistent and simple: the basics of supply and demand in a region should be thoroughly considered, personal finances and cash flow need to be comprehensively considered, and investors should not act out of panic or fear in a heating up market.
The road to recovery
In CoreLogic’s most recent home values index, Sydney recorded a values spike of 0.2 per cent, after consecutive months of plummeting into the sharpest downturn since the Global Financial Crisis.
Although there are signs of life, CoreLogic’s Tim Lawless cautioned investors against expecting massive capital gains, as were experienced prior to the 2016 downturn.
“Housing credit polices remain much tougher than they were prior to the [banking] royal commission as lenders continue to move away from the Household Expenditure Measure and examine borrower spending behaviours and expenses more closely,” Mr Lawless said.
“Also, lenders now have the benefit of comprehensive credit reporting whereby borrower debt profiles are more transparent, providing lenders with the ability to assess credit worthiness in more detail,” he said.
“The ongoing tightness in housing credit is expected to keep a rapid rebound in housing values at bay, despite the lowest mortgage rates since the 1950s,” he said.
You can read Smart Property Investment’s latest Sydney market update here.