Summary: Podcast Transcript Intro: Welcome to the monthly podcast of Australian Property Investor, Australia’s most trusted and widely-read property investment magazine. For information on how to subscribe to either our print or online magazine, as well as other great property investing information, please visit our website, www.apimagazine.com.au Lauren Day (LD): Hi listeners, welcome to this month’s podcast. I’m Lauren Day, journalist with API, and this month I’m speaking with Sydney-based WBP property valuer, Chris Lackey. Today we’re going to discuss the Sydney market, and what investors should be looking for in 2013. Hi Chris, and welcome! Chris Lackey (CL): Hi Lauren, how are you going? LD: Good thank you! LD: Now tell me Chris, where is the Sydney market at the moment? CL: Look at the moment, we still have vendors and purchasers reluctant to engage with the property market. We’re generally seeing a continuation of the uncertainty, which was an issue during 2012. Just as an indication, we actually saw during 2012 total sales volumes in New South Wales drop by 7.8 per cent from 2011, which was quite interesting. LD: So what do you see happening then in the Sydney market in 2013? CL: I think we’ve got to try and look at what the drivers for the market will be during 2013, whether it be interest rates, which, I think buyers are probably going to wait and see what happens and if interest rates have actually bottomed. We’ve got major lenders getting together and supposedly talking about out of cycle rate reductions, which would be a first, certainly from my exposure to the Sydney property market. So I think buyers are still going to take a ‘wait and see’ approach and perhaps look for a bottoming of rates or a clear bottoming of rates and probably in terms of prices, based on what we know and what we can see for the future, Sydney property prices based on current fundamentals have probably bottomed, really as a continuing issue of confidence for the market. LD: So do you think now is a good time or a bad time to buy and why? CL: I think for buyers it’s always going to relate to their individual circumstances. I guess, I’m not an accountant or investment adviser, but property I guess should form part of someone’s investment portfolio to some degree. Sydney is a major commercial centre for Australia. In terms of big business, so in terms of last year’s performance, overall, I think Sydney performed best of all the states. It certainly remains a state which needs to be considered for an investment portfolio. LD: So you would recommend Sydney then as a market to buy in, compared to say Melbourne or Brisbane or Perth? CL: Well I think in terms of supply, we’re not really addressing the supply issue in Sydney. We haven’t had that and that’s not going to happen quickly, so in terms of housing stock, particularly while vendors sit on the fence and take a wait and see approach, I can’t see that stock levels in Sydney are going to increase. That’s probably going to pin prices, particularly entry-level property. So if you’re looking to invest in Sydney and you’re looking to get into entry-level property, then I think probably yes, if you want to have Sydney as part of your property portfolio, yes, it’s probably as good a time to buy, considering interest rates during 2012 were three to 3.75 per cent and could possibly be lower again this year. LD: So what sections of Sydney would you see moving – would it be the west, the east, the north, the south? CL: I think you’ve got to be a bit cautious when you say, property is going to be ‘moving’. I think very much, with the availability of information, particularly statistical information, you can probably have actual sustainable growth and you can have short-term perceived growth. If you’re looking towards areas, say in the northwest or southwest of Sydney, where you’re having a lot of new housing stock being introduced, statistically,
