That chill you're feeling is more than just the bitter Sydney winter. After months of speculation, it is offical: the Sydney property market has ‘cooled'.
Figures recently released in the NSW state budget show that property purchases peaked at 210,000 in the 2017-2018 financial year and are expected to fall to 183,00 in this upcoming financial year.
This is also supported by the ANZ Banking Group who have predicted that property prices in Sydney will drop by 10% in the next twelve months.
For some time now we have been expecting the Sydney housing bubble to burst - nothing lasts forever, right - and experts are attributing the cooling off to a few different factors:
An increase in the housing supply: Sydney has undergone an influx of new residential buildings, with medium and high density apartments and units cropping up all throughout the greater Sydney area. It was inevitable that an increase in the supply would reduce the demand, and therefore the cost, of all properties.
A decrease in investor activity: The number of developers and investors buying Sydney property is down. Although first homebuyers are emerging to fill the gap, it is still not enough to make up for the decrease in investment.
Tighter lending restrictions: Ever since late last year, home loan growth has been slowing as banks and lenders increase their lending restrictions.
At this point you might be wondering how the downturn in property prices affects the demolition industry. The answer, unfortunately, is somewhat unclear.
For starters, although some months are busier than others, for the most part demolition is in demand, and as long as people have different ideas about what constitutes their ‘dream home’, this is likely to always be the case.
In fact, a decrease in housing prices could lead to more demolitions, as first homebuyers snap up old property on the cheap for the sole purpose of doing a knock-down rebuild. But this is just speculation on our part and really, only time will tell.