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Sydney property market: a fidgety child of strict parents (08.06.2017)

The government of the Australian state of New South Wales has announced an increase of the additional state duty from 4% to 8%. New rates are effective from July 1, 2017. The additional state’s stamp duty is charged on foreigners who purchase property in the state of New South Wales. It is the state where the city of Sydney, the economic capital of Australia and its largest financial centre, is located. And it is Sydney real estate market about which experts and market participants argue, trying to understand the nature of the phenomenal growth in property prices. In the meantime, the market continues to grow steadily, and, having just reached record level, prices are climbing to new heights.

The additional stamp duty on residential property buyers introduced since June 2016 by the state government as a measure to reduce demand and thereby slow down the price increase, making the Sydney market more predictable. Doubling the duty in just a year is, firstly, a recognition that the state government is not satisfied with the results achieved. Secondly, the state authorities have shown that they primarily connect the rapid growth of the market with the presence of foreign investors in the market.

The Sydney real estate market reminds a fidgety child of strict parents: “parents” (state authorities) are trying to rein in his hands, and “the child” (Sydney property market) continues to do whatever he wants. A short respite is the maximum that strict parents with such children can achieve and later pranks are continued with renewed vigour.

We dare to say that the Sydney residential real estate market will continue to grow. And we have very good reasons to believe so. The fact is that the demand for housing in Sydney is presented not only by foreigners. Being the largest and most developed of all Australian cities, it is an attractive market for investors from all over the country and a place of attraction for money and energy of Australians. In addition, most immigrants arriving in the country also settle in Sydney. In other words, buying an apartment in Sydney, one can be sure that it will always bring income from the rental. It does not matter whether it is a modest studio an hour from the downtown or elite apartments at Circular Quay, the main embankment of the city: there is strong demand for any segment.

Our specialists regularly visit the largest Australian city and receive information not only about all the new products of this market, but also about changes in the conditions for the presence of foreign investors. To answer the question when the rise in Sydney property prices will stop, an analysis of the behaviour of fidgety children will also help us to find it. Fidgety children lose their agility when they are sick. In terms of the property market, growth will continue until the Australian economy is advancing.

Also, children’s behaviour changes when they grow up and cease to be children, that is, when they move into a new quality. Fortunately for investors, the real estate market changes only in quantity. Therefore, given the characteristics of Australia and Australians, we can safely say that the Sydney residential property market is programmed to grow. Therefore, the best time to buy property in Sydney is now.

Ask your questions about the real estate market in Sydney and Australia here.