Buyers are hedging their bets in NSW in 2010

2010 is bringing with it a comeback in the real estate market. Suburbs that saw the greatest drop in value over the past couple of years are really starting to come back. Overall, NSW’s property market is about to enter a year of solid growth.

In 2009, the First Home Buyer’s grant stimulated the property sector throughout the global financial crisis, encouraging many first home buyers to get into the market and take advantage of the increased incentives.

Harcourts New South Wales, CEO, Chris Stephandellis said this first home owner’s rush produced a downside.

“Due to the increased competition in the market place, there was a spike in the market, with many sales exceeding asking prices particularly in the Bathurst area,” he said.

“Now, there is a decreased amount of first home buyers in the market because of the Grant reduction in December, and the looming threat of a fourth interest rate hike when the Reserve Bank board meets again in February,” he said.

Despite this, Harcourts is seeing growth in the market, with sales up 57 per cent in December 2009 compared with 2008.

“We are seeing buyers and in particular investor buyers hop back on the horse, taking advantage of the current low interest rates. Some of this confidence may stem from the decreasing unemployment numbers and that there is generally more confidence in the market,” he said

“This is evident by the fact that banks have loosened their stronghold on lending and their share prices in some cases have almost doubled during the 2009 market rally,” he said.

Added to this, the rental market remains fairly tight. There is still not enough supply to meet demand throughout NSW. This means rent prices will continue to rise, which is great news for investors.

Overall, the property market will make great spectator sport during the year as buyers look to grab a bargain while capitalising on the low interest rates before the next rate rise.