Sydney’s price growth outshines the rest

Sydney property investors continue to enjoy strong returns at the moment, as confirmed by the Domain Group's latest House Price Report. During the three months to December 2014, the median house price in Sydney marked a rise of 4.1 per cent, while units were up 2.9 per cent.

This growth wasn't confined to the final months of the year either, as unit prices ended 2014 14.1 per cent higher than they started, while units were up 10.4 per cent.

Senior Economist at the Domain Group Andrew Wilson said the Sydney market is experiencing "consistently strong growth", which is helping to support other areas that are not performing quite so well.

"Thanks to its status as the strongest capital city economy with high migration levels, a chronic shortage of housing and heady levels of confidence from buyers and sellers, Sydney remains the dominant force amongst the capital cities," noted Dr Wilson.

This isn't the only evidence that Sydney is the country's standout performer for anyone investing in real estate. The December CoreLogic RP Data Home Value Index revealed that during the final quarter of last year, home values in Sydney witnessed a rise of 2.3 per cent.

Over the course of the year, there were only two capitals where home values were up more than 5 per cent. Sydney's growth stood at 12.4 per cent, while Melbourne prices finished the year 7.6 per cent higher than they started.

Cameron Kusher from RP Data explained that the market could currently be working in the favour of investors, not least because affordability constraints are preventing many first home buyers getting onto the ladder. As a result, people are likely to be in search of rental property as they wait to build a substantial enough deposit to buy a place of their own.

Posted by Grace Neale