Red hot, not a boom but John McGrath warns on inner-Sydney residential market
The low interest rate environment was prompting price growth inner-city Sydney property markets, triggering McGrath Real Estate founder John McGrath to suggest the pace of price recovery in some property markets was a concern.
It could lead to trouble, he told the Aussie Home Loans three-day biannual sales conference in Sydney.
While noting some markets remained well below peaks, he said Sydney was "red hot" and the sweet spot was homes up to $1.5 million within 10 kilometres of the CBD.
"I haven't seen it this hot since the last real estate boom and I'm not calling this a real estate boom," he said.
“If there is pressure to keep growing at this level – which I don’t suspect we will – quarter after quarter after quarter, we’d probably end up in trouble because we just can’t grow this rapidly.”
"A bit of a growth spurt is a natural and welcome and healthy thing, it's bringing confidence in, but one would hope and expect that will settle into a more sustainable 5% to 8% growth over a longer period," John McGrath was reported as saying by News Ltd papers.
Aussie executive director, James Symond said the conference followed the group's biggest year with settlements for the 12 months to June 30 organically growing by 8%.Aussie increased its upfront net commissions paid to brokers by 15.6% on last year, due to a ‘combination of factors’, including a higher upfront rate from lenders and a higher pass-through rate to brokers.
“While we are growing strongly, the mortgage industry is transforming quickly and it is important we stay ahead of the game, providing new ideas and information to our mortgage brokers, staff and franchisees,” says John Symond.
