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Investors in Sydney’s metropolitan market can expect strong rental yields as the population continues to grow and construction activity declines.
According to an analysis of ABS data by Colliers International, metropolitan Sydney is facing a major undersupply of housing.
Sydney’s total residential building approvals were down by 18 percent for the year to March 2009, compared to the 12 months prior, Colliers said.
This was in contrast to Melbourne, where approvals dropped by only 1.5 per cent.
“These figures show a dramatic difference between Sydney and Melbourne’s new housing markets and Sydney’s developers will need more incentives to increase development activity,” said Colliers NSW research analyst Matthew Tiller.
“Strong population growth and declining building approval numbers can only mean that Sydney will continue to experience strong rental growth and low levels of affordability, as the number of new residents entering the property market outstrips the number of dwellings needed to accommodate them,” said Mr Tiller.
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