Sydney and Melbourne star performers: John McGrath

Chief executive of McGrath estate agents John McGrath has said the Australian market is in different stages of recovery related to price ranges, with many metropolitan markets in the very early stages of their growth cycle - at best.

In the McGrath 2015 Report he noted the Sydney and Melbourne have been the star performers with 62% and 32% growth respectively, since the GFC (2009-2015).

"However, if you look beyond the last few years and review growth in both cities over the last decade, it’s fair to say that longer term growth rates have not been as extraordinary. In fact, Australia’s two biggest cities both underperformed against their usual 10- year growth rates," he said.

"Looking around the country it’s just as clear that many other metropolitan markets are in the very early stages of their growth cycle at best – and in some instances as flat as the proverbial pancake. 

"So if we drill down on Sydney, what seems to be driving this demand? It’s pretty straightforward"

There are five key drivers: 

1. Record low interest rates 

2. Increased demand from small investors and SMSFs 

3. An underlying shortage of property coupled with continued immigration 

4. High demand from Chinese buyers 

5. A stable economy (apart from a few recent economic tremors).