Pockets Of Sydney Where You Won’t Overpay
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Pockets Of Sydney Where You Won’t Overpay

Inner-city areas haven’t shared in the city’s booming price growth.

By Kirsten Craze
Mon, Dec 6, 2021 11:14amGrey Clock 5 min

While prices across greater Sydney soared by nearly 27% to Nov. 1 on average, according to PropTrack, several luxury suburbs have had a fraction of that growth—or even price declines, particularly for apartments.

Cameron Kusher, director of economic research at PropTrack, explained how some highly desirable postcodes have outperformed their neighbours.

“At a suburb level, price growth can sometimes seem to not make sense. Prices in a particular suburb may have boomed over a year, while a neighbouring suburb with similar attributes and properties may have seen very little price growth, or even falls,” Mr. Kushner said.

“We measure median prices based on what sells, so compositional changes in the properties that have transacted can play a role in whether price growth is strong or not so strong,” he added. Such compositional changes could mean smaller or larger homes, more or less acreage or whether prices are skewed by a major outlier transaction.

Slowest Moving House Markets

PropTrack calculated the lowest-growth Sydney suburb for luxury houses (with a median above $2 million) to be in Waverley, a small neighbourhood bordering famous Bondi Beach. It only experienced a 0.19% rise during the year to reach a median of just under $3 million. In Artarmon, about five miles north of the Harbour Bridge, the median luxury-home price increased by just 2.75% to $3.08 million. The exclusive neighborhood of Longueville, a leafy waterfront location also north of the harbour, saw values rise 5.24% to a median of $4.53 million.

While the common thread among suburbs with the strongest house-price growth had been their proximity to water, or exceptional water views, the slower performers were more diverse, Mr. Kushner said.

“The lower-growth areas are a bit more varied; some are waterfront while some aren’t. In the coastal areas, you may find more waterfront homes were sold a year ago, whereas this year it’s properties further away from water (and therefore cheaper) that are selling,” he said.

Apartment Markets With Room to Grow

As with most major global cities, Sydney’s apartment market took a price hit at the height of the pandemic as homeowners, renters and investors stepped away from high-density living.

The PropTrack data highlighting the lowest annual changes in the luxury-apartment market (with a median above $1 million) showed that Northbridge on Sydney’s Lower North Shore experienced a 14.17% price decline to $1.21 million, highly desirable Rose Bay in the exclusive Eastern Suburbs saw a 9% drop in luxury condos to a median of $1.38 million; and the central business district had a 2.78% decrease to A$1.05 million.

“For units, overall price growth in Sydney has lagged behind the growth seen for houses,” Mr. Kusher said, adding that areas with low price growth typically had an abundance of condo inventory.

“Many of them are also inner city, which is likely to be a contributing factor,” he continued. “The suburbs with the strongest growth are typically waterfront and have a lower overall supply of units, which are generally lower density than those found in the inner city. This is likely a major factor driving demand and price growth in these markets.”

Why Some Markets Lagged Behind—Until Now

Reece Coleman, head buyer’s broker at Maker Advisory, said the slower performing Sydney markets had been in a slumber due to the pandemic but looked set to wake up.

“For two years, Australia had some of the toughest border controls in the world,” he said.

“Between 40% to 60% of buyers of our luxury developments around the city, particularly near the harbour, are foreign buyers. Without them buying, prices have been affected,” he said.

That means that even within Sydney’s overheated housing market, there may be a moment of opportunity now for luxury-condo buyers in inner-city areas before international travel picks up again.

Mr. Coleman added that Sydney’s North Shore markets were missing two clear buyer types.

“Traditionally there are a significant number of overseas residents moving here to educate their children at the exclusive schools up in North Shore such as Roseville College, Ravenswood and Knox Grammar. While the borders were closed the families haven’t come,” he said, adding that the North Shore housing market is also fueled by people relocating for work.

“It’s the home of the middle-class executive; the CFOs, CMOs and COOs. But they haven’t been relocating in the last two years either. Expats have been coming back, but we’re not getting those executives transferring from the U.S. or from Europe,” he said.

“So our property market has definitely been affected by our tough border stance.”

Now Australia has reopened borders for some international travel, including citizens and permanent residents, Mr. Coleman said it is only a matter of time before the “sleeper” markets awaken.

“We think January is going to be busy with families returning to Sydney, which will drive up these suburbs. We’re already seeing more inquiries from Hong Kong and Malaysia, from people looking to locate and get their children in local schools,” he said. The relocation for many expat and foreign buyers is carefully timed to fit in with Sydney’s school year which begins in late January.

A Return to Sydney’s Inner City

Adrian Wilson, director of inner Sydney agency Ayre Real Estate, said the inner city was about to go through a renaissance.

“There absolutely was a trend for a while where global cities were far less buoyant than they normally were. But I’m standing in my city office looking out the window and there are people everywhere, which is great,” he said.

“There’s definitely good value for buyers or investors who are willing to consider stock that isn’t necessarily in favour at the moment because of lower rental yields. Buyers with a medium- or long-term view could find some great opportunities around $1 million to $1.5 million in that Central to City South location, because that part of the market hasn’t performed as strongly as others,” Mr Wilson said.

He added that micro markets which experienced “marginally negative” price movement were those with a large investor ownership prior to the pandemic.

“The level of investor interest obviously dissipated during Covid. In some cases city rents fell by as much as 30% immediately after the first wave. But rents are now starting to stabilize, and many of those reductions have crept back up toward where they were before,” he said.

The only way is up for savvy buyers, according to Mr. Coleman, who is now buying several “pied-a-terre” apartments in Sydney for clients that fled the city during the pandemic.

“Sydney’s growth isn’t over. It’s an amazing time to buy in the inner-city areas, they represent amazing value,” Mr. Coleman said. “Sydneysiders migrated out during Covid, but now those areas are coming back to life. We’re literally days away from foreign visitors and international students returning. If the rents go up, then prices will go up.”

 

Reprinted by permission of Mansion Global. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: December 3, 2021.



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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It’s a slam dunk as a covetable $2m KDR site complete with basketball court hits the market in the Hills District

The ball is in the buyer’s court with this knockdown/rebuild opportunity

By KANEBRIDGE NEWS
Tue, Apr 18, 2023 2 min

Glenhaven in Sydney’s Hills District is one of those areas that locals tend to keep to themselves. Leafy with large blocks on offer, the suburb takes its name from its valley location, with the northern end originally known as the Glen and the southern end called the Haven. 

En route from Parramatta to the Hunter, Glenhaven has become an ideal place for growing families in search of a little more space, or even room to house several generations under one roof.

The challenge is finding properties that tick all the right boxes.

As demand for trades and supply chain issues continue to ease, now could be the right time for a knockdown/rebuild project for would-be buyers looking to create their dream home.

Fairmont Homes specialises in knockdown/rebuild projects in Sydney. General manager at Fairmont Homes, Daniel Logue, said there are key features to look for when choosing a knockdown/rebuild site.

“The key items we look for are the site falling to the street, not to the rear, to help with stormwater drainage as well as access to the site,” he said. “Neighbouring property front setbacks are also important. In some older areas, the older houses are set closer to the street, meaning your new home will have to be set to suit.

“Value for money and the return on the end sale price of the home is another issue.”

If possible, he said designing a home that meets the criteria of the Complying Development legislation will speed up approvals considerably.

While suitable knockdown/rebuild sites can be hard to find in Glenhaven, there are still hidden opportunities if you know where to look.

One block at 158 Gilbert Road, Glenhaven is ideally suited for rejuvenation. With almost 850sqm to play with, it slopes down to the street and sits between neighbouring properties that have already been stylishly updated.

 

 

An existing basketball court at the rear could provide the perfect teen backdrop to a family home, or it could make way for a larger house with landscaped gardens and pool. Alternatively, it could be the perfect position for a cabana or granny flat to serve as in-law accommodation or a source of secondary income.

With recent sales of completed homes in nearby streets reaching well above $5 million, it’s a great opportunity to make a slam dunk of a buy into one of Sydney’s best kept secrets.

Address: 158 Gilbert Road, Glenhaven
Price guide: $1.8 million
Inspection: By appointment only

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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