Low vacancy rates continue to underpin the NSW residential property market, with capital growth rates remaining relatively stable compared to other capitals, according to research from CBRE.
CBRE's latest Residential MarketView report shows sales volumes for Sydney houses are showing signs of a recovery, with a modest increase of 3.2 percent over the year to March 2012 to 42,118, while 40,452 units were sold over the same period, an increase of 6.2 percent.
CBRE senior director Ted Hoskin says although house and unit markets remained under pricing pressure, recent results pointed to a moderate recovery for the state.
“With increased sales volumes for both property types, it appears that although not yet supporting a longer term recovery, the sustained down trend in market activity appears to have stopped and a greater degree of stability is now being recorded," Hoskin says.
Across the state, affordable properties continue to attract most demand, with prestige homes remaining under pressure.
The Sydney CBD market experienced solid demand for units priced below $500,000 although units up to $1 million faced weaker conditions, while prices in Sydney’s north-west and western suburbs remained relatively stable across the quarter, with steady demand particularly evident in the lower to mid market ($400,000 - $650,000).
Sydney's south west market, including growth centres around the Macarthur area, has slowed for lower priced properties, ($280,000-$400,000) with reduced buyer demand and contracting sales volumes.
However, the south west middle market between $400,000 -$500,000 has attracted steady levels of demand.
For the rental market, Sydney remains the tightest nationally - house rents rose by 6.9 percent and unit rents by 8.9 percent over the year to March 2012.
Weekly rents for houses and units were sitting at $545 and $490 respectively at March.
Hoskin says the recently announced amendments to the NSW Government’s First Home Owners Grant would bring a considerable boost to the market when changes came into effect later in the year.
“By increasing the grant for buyers of new homes to $15,000, we can expect to see strong growth in the new home sector, particularly in the North and South West growth centres," he says.