Sydney's booming residential property market was nearing peak: John Symond
Aussie Home Loans chief John Symond has forecast that Sydney's booming residential property market was nearing its peak.
But he quickly added he thinks "there's buckley's chance of a price correction."
He told the 7th annual Citi Australia & New Zealand investment conference yesterday he could see Sydney markets "getting trickier suburb by suburb."
"But the good news is that steam is coming out of the market and sanity's coming in.
"I think we're going to see a more flat market," he said.
"Hot areas will still see a seven to nine percent gain, in other areas you might see a three to four percent, some other areas a five percent drop," he anticipated.
"You have to do your homework."
His comments came as the CBA joined Westpac in increasing home loan interest rates with CBA’s rate increase of 0.15% pushing up its package loan rate to 5.10%.
The veteran mortgage broker expected all four big banks would raise rates in response to APRA’s capital requirements.
"If all four come out I think that will force the Reserve Bank to drop rates another 25 bps, so that consumers feel their real interest rates haven't gone up," he said.
But with big banks poaching customers from other big banks to get some loan book growth, he said Australian borrowers "have never had it better in my 40 years.
Except for Sydney and Melbourne, the rest of Australia had not had the property boom, he said.
"You've got to remember between 2002 and 2012, Sydney was the worst-performing capital city in Australia - 2.2% growth per annum before inflation.
"All of a sudden, we're seeing 15-18% growth in the last three years driven by lowest interest rates in Australia's history and a surge in foreign demand, particularly Chinese.
"They are driving a lot of the prices in places like Sydney or Melbourne.
He said for a collapse there either had to be a sharp increase in interest rates and "there's no hope of that happening for some years, or unemployment picking up."
"I think we are approaching the top of the market.
"Different suburbs, in my opinion, will perform differently going forward," he said, adding there was a risk in off the plan were too many new apartments hit the market.
"Prices are levelling out and in certain suburbs I can see prices dipping a bit but certainly no collapse in prices because the appetite to own real estate is so great in this country."
"I think the price increases will abate, I think, by the middle of next year when it will be a buyer's market," he said.