Sydney market poised for further growth

Any potential buyer considering property investment in Sydney likely already knows the New South Wales capital city was the clear leader when it came to price growth throughout 2013.

However, that hasn't stopped Australian Property Monitors (APM) from making it official in a new report detailing growth in capital cities across the country over the past year.

"Sydney was the standout performer amongst the capital city markets in 2013 with annual
prices growth set to exceed the 12 percent recorded in 2009 - which would be the best result
in a decade," APM Senior Economist Dr Andrew Wilson stated.

"Sydney’s inner west, upper north shore and west suburban regions recorded strong prices growth of up to 20 percent over the year, with the inner west median house price now tracking above $1 million and the upper north shore close behind it."

Mr Wilson said that record levels of investor activity were a major factor in the city's house price growth over 2013. He also forecast that the NSW capital is poised for a good beginning in 2014.

APM predicts that Sydney house prices will increase between 5 and 7 per cent during 2014, with the majority of this rise happening in the first half of the year.

New data supports APM forecast

Investors may want to begin the search for a quality buyers agent in Sydney, as figures from the latest RP Data-Rismark Home Value Index show that APM was on the right track concerning home values in Sydney.

The index reported a 1.2 per cent capital gain across all capital cities during January, as well as a 2.7 per cent rise during the three months ending in January.

"Sydney and Melbourne were the clear drivers for capital gains over the past year, with values up 13.4 per cent and 11.9 per cent respectively over the 12 months ending January 2014," said RP Data Research Director Tim Lawless.

"Excluding Perth, every other capital city has recorded growth of less than 5 per cent over the past year."

While moderation in value growth is expected for later in the year, this is forecast to occur more in Melbourne than in Sydney, according to Rismark CEO Ben Skilbeck.

Mr Skilbeck went on to say that strong population growth, higher demand for housing credit and positive consumer sentiment are likely to keep prices elevated for the foreseeable future.

Sydney luxury real estate reaping rewards

Investors in Sydney prestige properties will be glad to know the premium sector of the housing market has also experienced growth in recent months.

RP Data and Rismark reported that the premium sector is posting the highest capital gains, compared with the broad middle segment and most affordable segments of the housing market.

For example, dwelling values across the most expensive quarter of the capital city markets experienced a 6.7 per cent increase over the past six months. This growth is in comparison to 5.8 per cent across the mid-market and 4.7 per cent in the most affordable quarter of the market.

Meanwhile, premium dwelling values rose 10.1 per cent over the past year compared with 9.5 per cent and 7.5 per cent growth in the mid-market and affordable segment, respectively.

However, regardless of the housing type, all this data points to one conclusion: Property investment in Sydney was a lucrative endeavour during 2013 and appears to be a wise strategic move for investors in 2014.