Bullish Louis Christopher forecasts strong gains for Sydney in 2015
Louis Chrisopher, SQM Research's managing director, had the most bullish Sydney 2014 forecast.
In late 2013, Christopher predicted that Sydney's prices would rise 15%-20% over the 2014 calendar year.
While prices weren't that strong, he was closest to the pin, now that the annual figure are in.
Other experts were notably more subdued, with many tipping that prices would slow significantly in 2014: Domain Group senior economist Andrew Wilson and Property Observer's Jonathan Chancellor both predicted 2013's growth would halve to around 7%. Observer Pete Wargent tipped Sydney prices to increase by 6% to 9%. McGrath Estate Agent founder John McGrath downgraded his 2014 Sydney forecast from 10% to 5-8% in June.
We now know that Sydney recorded around 12.4% price growth in 2014 across all dwellings, according to CoreLogic RP Data. House prices were up 13.4% to $858,000, while unit prices increased by 8.3% over the year to $615,000.
The median house price for Sydney is now $873,786, after a 14% rise in prices during 2014, according to Fairfax's The Domain Group.
Christopher's confidence in the Sydney market remains, particularly given the Reserve Bank's February announcement that it would cut rates by 25 basis points to a record low of 2.25%.
"We believe Tuesday's interest rate cut will further stimulate the Sydney housing market through the full calendar year 2015," Christopher told Property Observer.
"Our forecast for this current year, made back in September 2014, would be a rise of between 8-12%.
"This assumed a stable interest rate environment. With this rate cut we believe the market will now likely increase by the upper end of this range.
"Sydney on top of the 30% gains we have had since the start of 2013 will mean the market may well be up by over 50% in Sydney in just three years."
His price prediction is once again more bullish than those made by many of his contemporaries. Wilson this year has forecast 7-10% growth, while NAB's Residential Property Survey respondents predict 4.1% gains. Wargent has pitched his forecast slightly lower than last year, this time predicting 5-8% price growth in 2015.
Whether yesterday's rate cut will cause experts to revise their forecasts remains to be seen. Meanwhile, the SQM Research founder's confidence is not reserved for just the Sydney market:
"We are also rather bullish now on holiday locations on the east coast of Australia given that the lower Australian Dollar should further assist local tourism economies," Christopher said.
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