Renters to gain as apartment investors suffer
Renters are set to benefit from apartment overbuilding in Sydney, a new study has suggested.
A report by property valuer WBP Property Group has claimed that rents will decline in Sydney as a result of an oversupply of apartments, the Australian Financial Review has reported. The report pointed out that the pace of property price gains in Sydney had halved to 9.4% in the 12 months to August from the prior year, and that apartment prices had grown at a slower pace than house prices.
“Amid the current credit environment, Sydney’s deteriorating rental market will drive prices down, particularly in those areas in which there is an ample supply of apartments, areas like Botany LGA, Auburn, Lane Cove and Ryde,” the report said.
WBP Property Group also advised investors to be cautious about buying in Parramatta, which it said has the highest vacancy rates in Sydney, the AFR reported. But the report predicted Bondi would continue to see growth.
The report also suggested that new building design regulations could cause difficulties for developers, the AFR said.
“Where one a site might have accommodated 80 units, it may now only allow 50,” the report said.