Australia's Sydney property market to recover - DTZ
Property returns in the Australian city of Sydney are set to turn
positive in 2010, making it one of the first cities globally to recover
from a property slump, research firm DTZ said on Tuesday.
DTZ expects total returns for Sydney assets to reach 9 percent in
2010 from minus 27 percent in 2009. In comparison, total returns for
Tokyo assets are projected to be minus 5 percent in 2010, compared with
minus 24 percent in 2009.
The Australian economy has been more resilient to the global
financial crisis than some other major countries, with the job market
holding up and recent indicators showing business confidence is
improving.
The central bank recently revised up its growth forecasts and took a
step towards an eventual rise in interest rates.
"Prices have adjusted faster than we initially expected and we are
starting to see some real value, however the hunting season is not fully
open yet," David Green-Morgan, DTZ's Asia Pacific Research Director,
said in a statement.
"From the investment side, Sydney and Melbourne will recover earlier
than Perth and Brisbane, which are only expected to experience the first
signs of recovery towards the end of 2011 or early 2012." Office rental
growth in Sydney is expected to recover to minus 2 percent in 2010 and
positive 4 percent in 2011, from minus 15 percent this year, DTZ said.
It also said Sydney will also be the first city in Asia Pacific to
see its property market reach fair value in 2009, indicating that prices
are cheap enough for investors to get above-market returns over time.
Currently, London is the only city offering fair value, and Tokyo and
Shanghai will have to wait until 2010, it added.
Green-Morgan said offshore investors keen to get into the Sydney
commercial market may have only a small window of opportunity as
domestic real estate trusts (REITs) recover.
"Probably in the second quarter of 2010, the REITs will probably be
much healthier and superannuation funds will start to look at again and
invest in direct property," he said. SYDNEY, Reuters
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