Sydney's price rises show no sign of abating
Home loan interest rates remain at a record low, but in order to make the most of what the market has to offer, it's essential to know what property prices are doing.
This will help you establish a budget, as well as make sure you have the necessary funding in place to be able to secure the property you have your eye on.
Sydney's property market is unlike many other parts of the country, so it's essential to have an in-depth knowledge of exactly what this cosmopolitan city is like to buy in.
Prices continue to outstrip the national average
Sydney has a reputation as one of the country's most expensive places to buy and the latest Residential Property Price Index (RPPI) suggests this isn't showing any sign of slowing down.
The Australian Bureau of Statistics (ABS) revealed that during the three months to September, prices in the Harbour City were up 2.7 per cent on the previous quarter. They were also 14.6 per cent higher than a year earlier.
To put these figures into perspective, the RPPI for Adelaide, Melbourne, Brisbane and Hobart increased just 1 per cent, while Canberra and Darwin's was up 0.3 per cent. Perth was the only location to register a fall, which stood at 0.1 per cent.
Not only this, SQM Research has revealed how property price rises are becoming unsustainable in the New South Wales capital.
The weekly update released on November 11 pointed to a median asking price for freestanding dwellings of $1,005,800, putting prices out of reach for some buyers.
Louis Christopher, managing director of SQM Research, said: "Right now it would be impossible to purchase a free standing house in Sydney's inner ring for under a million dollars, and will become increasingly difficult to purchase a free standing house in Sydney's middle ring for under a million dollars."
RPPI data showed the collective value of Australia's residential dwellings stood at $5.3 trillion during the September quarter, putting the mean price at $563,100.
However, the SQM Research statistics indicate this average is being well exceeded in Sydney, which is something any buyer will need to factor into their calculations.
This will, however, depend on where in the city you decide to buy and the type of investment you are hoping to make.
Take opportunities to buy rather than rent
Sydney's rental market is perhaps unsurprisingly thriving, especially as people find it difficult to get onto the property ladder.
However, as fewer rental properties become accessible, now could be the time to think about taking a look at cheap home loans and buying a nest egg of your own.
The September 2014 Vacancy Rate Survey from the Real Estate Institute of New South Wales (REINSW) showed there was a month-on-month decline in the number of properties to rent in Sydney.
As a result, finding a rental that ticks all the right boxes is likely to become more problematic, potentially giving you the push you need to think about getting onto the ladder.
President of the REINSW Malcolm Gunning noted: "Rental vacancies declined across Sydney. Outer Sydney saw the largest declines, hitting ten-month lows.
"Outer Sydney vacancy rates dropped 0.2 per cent to 1.4 per cent, while middle Sydney fell 0.3 per cent to 1.9 per cent and inner Sydney remained steady at 1.8 per cent."
With the cash rate remaining at an all-time low and the prospect of the rental market tightening further, it's possible demand for property in the Harbour City will only continue to grow.
Do your homework beforehand and you could find yourself making an investment that pays dividends for many years to come.
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