NSW MARKET OVERVIEW
NEW SOUTHWALES
NSWMarket Overview with Barry Cawthorn How does the property market in (NSW) compare to other states at the moment and what are some key trends that are occurring? Who have been key investors over the last 18 months and have you seen a shift from previous years?
New entrants to market have diminished from previous years. This speaks somewhat to the increasing sophistication of investors, the level of commitment required to gain the knowledge needed to act with confidence. The vast majority of our investment activity takes place off market between sophisticated sellers and buyers. Both parties mostly clients for whom we manage assets. What is your secret to achieving the exceptional results that you have? This speaks to who has been investing in recent years. They are existing asset management clients who take advice from credible, professional data centric agents like Bawdens. What are some of the most significant or rewarding projects that you’ve been involved in and why? Conceptualising a development for a client. Advising what to build. Pricing the likely realisation. Watching the development be constructed. Selling out the development for a realisation at far above our projections. What advice would you give property developers today? Research is important but bringing that to life requires an injection of perception borne out of the instinctive experience of a successful agent. These developers who can recognise the importance of that will always build projects in demand irrespective of what point in a cycle a property sector might be at.
Within NSW any key trends can be seen more broadly as themes also influencing Australia’s east coast markets at Sydney, Melbourne and Brisbane. Investors in these markets post Covid are alert to the trend that capital is prepared to take an increasingly long term view to a commitment today. A developing theme is that participants are increasingly recognising that capital growth is likely to emerge from increasing rental cash flows in a inflation environment as opposed to price growth in recent years as that was driven only by falling interest rates. What sectors are most in demand? Industrial remains very strong with the sector remaining attractive for its perceived rental growth ahead. We found residential development sites in the $10-$20 million mid tier to also be keenly sought. What do you see as the biggest challenges that face buyers and sellers in todays’ market? There are several some obvious and some not so obvious. The obvious include coming to terms with the fact that if you are going to be successful you will need conviction. This is because it is likely particularly in the industrial sector that you will be paying a price that is higher that the last comparable deal done. Perhaps less obvious is the fact that participants are increasingly sophisticated often holding a very deep understanding of macro issues and deep knowledge of local markets of interest to them. You have to be at the top of your game.
BARRY CAWTHORN Managing Director Bawdens
26 –April / May 2022
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