State of Markets - NSW July 2012

NEW SOUTH WALES

NSW houses have 90,000 shortfall

At least 90,000 NSW houses need to be built, and quickly, according to a report by the Urban Development Institute of Australia.

A chronic undersupply was highlighted in the Mckell Institute’s report earlier this month and a lack of dwellings is seen as the reason why Sydney rental and house prices are some of the highest in the world.

“Recent studies have indicated that Australia – and Sydney in particular – has one of the least affordable housing markets in the world,” the report said.

“It is estimated that by 2020, New South Wales will have a housing shortage of almost 190,000 homes and Sydney’s housing costs are now higher than London and New York.”

Land has been identified for development of 90,000 homes, much of it lying to the west of Campbelltown.

Rental yields rising in pockets of Sydney

Despite an uncertain market, rental yields have been rising steadily for one and two bedroom units in several areas of Sydney.

Campbelltown, Fairfield, Liverpool, Maitland and Canterbury rents for one and two bedroom apartments were found to have grown the fastest in the Sydney greater metropolitan region since 2006, according to PRDnationwide.

Research analyst for PRDnationwide, Oded Reuveni-Etzioni, explained that those profiting from this increase are investors who had already done their research thoroughly.

“Savvy investors are attuned to the changing preferences of renters and recognise the growing rental markets in the middle and outer suburbs of the metropolitan area,” Mr Reuveni-Etzioni said.

“Investment opportunities also exist in areas outside the metropolitan area, where strong demand and limited supply of units maintains the pressure on rent prices,” he added.