Sydney Buyers Look South

PUBLICATION: Sydney Morning Herald
AUTHOR: Nicole Lindsay

A wave of Sydney investors in the Melbourne apartment market is tipped to strengthen in the next few months.

Lower prices and higher immigration levels are the lures for Sydney buyers put off by the harbour city’s more expensive entry points.

Conversely Melbourne investors are increasingly discouraged by new stamp duty regulations which remove discounts for non-home buyers.

The shift comes as Urbis’ apartment report showed a 40 per cent decrease in apartment sales across Australia in the June 2017 quarter.

The weighted average cost of an apartment in Sydney rose significantly to $1.15 million – up 13 per cent or $151,000 – whereas prices for inner Melbourne fell by $51,000 to $655,686 thanks to a surge in sales of one-bedroom flats.

Urbis national director of property economics and research Clinton Ostwald said the price of a two-bedroom, two-bathroom apartment rose by $200,000.

“Obviously the Sydney market is extremely competitive, and that translates to the apartment market,” Mr Ostwald said.

Gurner managing director Tim Gurner said buyers from Sydney “are definitely coming and I think they are coming in great numbers”.

They make up between 25 and 30 per cent of the investor pool he’s dealing with, Mr Gurner said.

“I don’t think it’s as much as it could be, given Melbourne is so affordable,” he said.

“Melbourne investors are slowing down because of the stamp duty changes but it’s not putting off Sydney buyers because they are already used to higher prices.”

Evolve Development managing director Ashley Williams said: “We’ve been seeing it for the past 12 to 18 months.

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