Market Report Australia boasts economic confidence which will continue to fuel business confidence.

Continued interest rate rises will have a slowing effect on the real estate market yet it is important to remember that interest rates are still historically low averaging out at around 7%. At present the N G Farah auction clearance rate is at just over 90% for 2010 as properties in certain areas of Sydney are selling for well above current market expectations.

Home buyers will be pleased that there is a serge of properties coming onto the market in the south east region of Sydney over the next four to six weeks that will give buyers a greater choice. At the same time, properties are being sold in a very short period of time.

In many instances properties are sold to the first buyer as in today’s market buyers are educated on price and are clear and concise with what they want. Understandably some buyers search for a home for over a year until they find something that suits them and invariably buyers will have to compromise on what they want.

Traditionally the market starts to slow in the colder months, yet we believe market conditions will remain buoyant in the next three months as the amount of buyers outweighs the amount of sellers.

Suburbs such as Botany, Mascot, Eastlakes, Rosebery, Malabar, Alexandria, Chifley, Matraville and Pagewood continue to out-perform the more illustrious coastal suburbs.

Off the plan sales are also extremely strong at the moment with N G Farah recently selling out of the following projects.

• Rockpool Townhouses at Little Bay (sold out)
• Alaris Apartments at Little Bay (sold out)
• Manta Apartments at Little Bay (sold out)
• Peninsula Apartments Matraville (80% sold)

Investors who are considering purchasing in the Sydney market can expect a return between 4-6% on residential property. This is the highest returns residential properties have returned in many years. The shortage of rental properties across Sydney reflects the strong returns and we believe this trend will continue for at least the next 12-24 months.

Ultimately Australia boasts economic confidence which will continue to fuel business confidence and have a flow-on effect though to the property market. If inflation continues to rise this will undoubtedly put pressure on the reserve bank to increase interest rates again.

- Glenn Farah