Prospective buyers should buy now before Sydney prices start to climb again with signs of a recovery in the housing market looming, property insiders say.
New figures released this week by property analysts Residex reveal Sydney property values have risen by more than six per cent in the past year despite talk of a continuing slump due to rising interest rates and low levels of affordability.
While gains have mostly been in the more affluent suburbs, overall Sydney has recorded a growth in median home values of 6.39 per cent in the year to the end of March, 2008.
Head Residex statistician John Edwards predicts Sydney values to increase by six to eight per cent this year.
"For the next couple of years there will be growth, particularly in the unit sector,'' Mr Edwards said.
"If you can afford to buy you must do it now because it's not going to get any cheaper.
"There are sellers out there being tapped on their shoulders to sell by their banks, and there will be bargains to be had, even in the middle to upper socio-economic suburbs.''
Macquarie Bank chief economist Rod Cornish said he does not expect prices to drop by the 30 per cent figure recently reported, and instead predicts a slower recovery this year.
"What would have been quite a reasonable year will be pushed out by rising interest rates, and so I predict this year to be reasonably subdued,'' Mr Cornish said.
"We started to see some growth in the second half of last year, but that has petered out a bit due to interest rates.
"But with the potential for rates to be cut next year, we have good indicators for growth next year.''
The best-performing suburbs, according to Residex, were Whale Beach, where the median value grew by more than 25 per cent to $3.792 million in the year to March, followed by the inner city suburb of Chippendale, where a 25 per cent rise pushed values to $638,500.
The eastern beachside suburb of Bronte was third, with a 24.4 per cent hike to a median of $2.208 million.
At the other end of the scale, the south-western suburbs of Raby, Leumeah, The Oaks and Macquarie Links topped the worst-performing suburbs list with drops in median values of between five and eight per cent.
"It's what we would expect at the start of a housing cycle,'' Mr Cornish said.
The unit sector recorded gains, with Sydney apartments increasing in value by 6.18 per cent to a median of $402,000.
Regional NSW showed more modest growth. House values rose by 4.57 per cent but dropped 0.2 per cent during March.
Best performers were headed by Broken Hill (27 per cent) on the back of the minerals boom, followed by the northern towns of Byron Bay (23.1 per cent), Kingscliff (21.8 per cent), Tweed Heads West (20.4 per cent) and Brunswick Heads (19.6 per cent).
