The Sydney residential property market is on the verge of an upswing after three years of plummeting prices, Adviser Edge has predicted.
“Overall our forecast is that the Sydney median house price is likely to rise by 10.5 per cent for this current calendar year,” Adviser Edge head of property research head Louis Christopher said.
“That said, Sydney’s west and south-west, however, are still experiencing a downturn with last year’s interest rate rises biting hard.”
The forecast is not so rosy for Perth and Darwin, which where the markets are tipped to decline.
The Adviser Edge report also found the east cost office market is likely to outperform for the duration of 2007 based on falling vacancy rates, a rise in face rents above the consumer price index and a catch up in yield compression compared to other cities.
Yields for direct commercial property across the country have fallen from 7.6 per cent to 7.1 per cent for the first quarter of 2007. Office market yields have also dropped, falling by 70 basis points from 7.9 per cent to 7.2 per cent with blue chip central business district offices falling to 6.3 per cent.
Adviser Edge has predicted there will be 25 per cent more vacant office space because of new construction. Industrial yields are also tightening, the report found.
