Perhaps it’s the apartment sector that will reap the benefits of an increase in sentiment
- Written by Tim McKibbin, CEO, Real Estate Institute of NSW
We have our long-promised roadmap out of lockdown for when we the state reaches the 70 percent double-dose milestone and while the NSW Government will retain the right to shut down areas as needed to quell subsequent outbreaks, the overall impact is likely to be a boost in confidence.
In a broader economic sense, any improvement in consumer sentiment is welcome news.
But in a property sense, there’s actually not a great deal of room for improvement. Week on week, real estate continues to outperform, fueling the economy.
Clearance rates are already very high. This should continue in the weeks ahead as reduced volumes and intense demand combine to produce predictably strong results for vendors.
Prices can be expected to remain steady and strong. It’s well-known the trajectory house prices have taken during the pandemic but recent figures from CoreLogic suggest the rate of apartment price growth is starting to close the gap.
More and more, investors are coming back into the picture. The Government recently clarified the rules allowing one-on-one inspections for investors, though limits on their geographic movements persist, which will perhaps provide further confidence to investors to make a play.
Many investors target apartments due to their relative affordability and, if the product is new, the depreciation benefits. Owners of furnished rental properties are able to obtain considerable tax breaks when they replace items like hot water services and a latex mattress.
In lieu of a proper commitment to increase supply, if there is indeed scope for further improvement in the real estate market, perhaps it’s the apartment sector that will reap the benefits of an increase in sentiment.