Sydney house prices could continue to rise in the medium term, driven by three factors:
1. Interest from foreign buyers. In 2020 The FIRB approved 7050 applications from foreigners for residential property purchases totalling $17B. That’s 19 properties purchased daily by foreigners at an average price of $2.4M and it’s fair to assume most of those purchases are in Sydney’s blue chip suburbs
2. Next year could see the return of immigration, and with an increase to our intake numbers exceeding pre 2020 levels. We need migrant tax dollars to repay our national debt, and keep our building and education industries thriving.
3. An increase in loan products which unlock the equity in baby boomer assets. Boomers are wealthy, mostly debt free, and long lived. Lenders will want to bypass the delayed transition of wealth and access that security by becoming the intermediary for the ‘bank of Mum ‘n Dad’. We’ll see loan products allowing larger deposits/cashouts, and larger purchases secured by parents assets which of course will add fuel to house prices.
This is just my opinion, no crystal ball here. I’d love to hear what you think! Can you see further price growth for Sydney property? Or will some unforeseen factor put the brakes on? Please do share your comments & thoughts below.