By Herron Todd White
Whilst there are obvious fundamentals that appeal to all sectors of the property market, many aspects that appeal to first home buyers may not be as important to upgraders or prestige end buyers. Along the coast, it may be proximity to the beach or harbour, whereas on the fringes it might be the size of the block of land or the level of accommodation.
First Home Buyers
Generally, first home buyers are looking to enter the property market at the affordable end of the market. This will mean making certain sacrifices in regard to location or size and condition of improvements. Despite this, there are still fundamentals that will attract these buyers.
Within inner-city Sydney, owner-occupiers at the cheaper end of the market (generally being sub $1 million) are looking for proximity to lifestyle amenities. This market purchases one and two-bedroom units, often without parking in older to semi-modern complexes in average condition. This demographic primarily comprises twenty and thirty-something, young professional couples and singles who are happy to pay a premium to be within close proximity of the CBD in order to reduce their commute time and improve their work-life balance. In turn, they often seek proximity to public spaces such as parks, for example, Moore Park, Prince Alfred Park or Rushcutters Bay Park, and social and dining hubs such as Surry Hills or Potts Point. Since many go without cars, proximity to public transport is essential, whether that is a major thoroughfare such as South Dowling Street or Oxford Street for frequent bus services or a train station for access to the CBD and surrounds such as Redfern, Kings Cross or Central.
The main fundamental for first home buyers in Western Sydney is the same as for upgraders and prestige buyers – location, location, location! Whilst that won’t necessarily mean close proximity to the CBD, it will still mean proximity to services and transport. The type of asset that first home buyers will be looking at will be a major difference.
First home buyers in Western Sydney these days are generally buying property sub-$650,000. For that sort of money, you are buying a modern two-bedroom unit in a north-western suburb such as Castle Hill, or a detached house in the outer west suburbs such as Blacktown or Penrith. Being close to motorways and rail, but not too close, is key for commuting western Sydney residents. Affordable property with close proximity to major services such as shopping and transport links for the sub- $650,000 price range will generally be medium to high-density real estate.
An example is the recent sale of a modern two-bedroom, two-bathroom unit in Castle Hill for $650,000. This unit is within walking distance of Castle Towers shopping centre and the newly constructed North West Metro station. Given the cost of detached dwellings in the local area, units such as these are popular with first home buyers due to having the right balance of proximity to key services and price point.
For slightly less at $635,000, first home buyers can purchase a modern three-bedroom, two-bathroom terrace in the Thornton Estate in Penrith. This property is within close proximity of Penrith train station and shopping precinct.
For first home buyers with a little more to spend and with the need or want for a house on a good size block of land, there are opportunities available in good suburbs in the middle ring of Sydney. Peakhurst is located around 20 kilometres to the south-west of the CBD and is close to two train lines and the M5 motorway.
The downturn in prices over the past two years has made Peakhurst an attractive option for those looking to buy a property with a budget of under $1 million. A recent deceased estate sale in Clarendon Road, located within walking distance of Riverwood railway station and shopping strip, saw a two-level, 1960s brick and hardiplank dwelling with four bedrooms, two bathrooms and double carport on 531 square metres of land. The property was in very basic condition with some upgrades or renovations required, however, provided good entry-level value at $825,000.
Upgraders are generally looking to upsize due to growing family needs or looking to relocate to something more modern or better located to the services and amenities that appeal to them.
Within inner-city Sydney, owner-occupiers deciding to upgrade generally spend $1 million to $3 million and are looking for larger apartments or terrace housing within the city fringe areas, preferably with some outdoor space for family or pets. Areas such as Paddington, Redfern and Glebe are common choices for this demographic, comprising of professional thirty- to forty-something couples often with one or more children. Aside from the previously mentioned benefits of inner-city living, this demographic often looks for properties affording car accommodation for the convenience of occasional car use, however, within village settings such as the previously mentioned areas, most local shops, schools and amenities are within walking distance.
The inner west region of Sydney is a large and diverse area which ranges from the inner suburbs of Newtown, Glebe and Balmain and stretches as far as Strathfield which is located approximately 15 kilometres from the CBD. Some of the middle ring suburbs of the inner west include Annandale, Leichhardt and Lilyfield which comprise a range of property styles and are located approximately five to ten kilometres from the CBD.
Most upgraders in this area would be looking at either attached style housing or freestanding properties with a price tag of anywhere from $1 million to $2 million depending on the usual property attributes such as location, size of dwelling and land, condition, features, parking provisions, views or aspect and natural light. More substantial properties in this region easily exceed the $2 million dollar price point, however, there is plenty of choice for upgraders in this range.
This market segment is potentially upgrading from a smaller style unit and needs more space for a growing family, however still wants to be close to the city and have the benefits of transport, parks and the café lifestyle. In addition to the property attributes already mentioned, these buyers tend to focus on proximity to transport (railway, light rail and bus routes), schools, shopping, cafes and parks. This particular market segment is generally aged from 30 years old and above.
A terrace at 15 Justin Street, Lilyfield which sold in May for $1.415 million was advertised with the following features highlighted:
“Set on a generous block complete with child-friendly level lawns, it features an abundance of outdoor entertaining space, nestled in a quiet street just 500 metres walk to Lilyfield light rail station.”
Nestled in a quiet yet superbly central location, offering easy access to the CBD only five kilometres away, from here you’re only moments from Rozelle’s cosmopolitan café/dining precinct and harbour foreshore parks.”
In the Northern Beaches, it is no surprise that upsizers require additional space for their growing families, so the size of their family and their financial situation will ultimately dictate the options. Location will generally take priority over quality of finishes and land component, as they are generally well established in their local communities and wish to remain as close to their current local facilities as possible. The upsizer market is typically within the $1.5 million to $3 million range, depending largely on the location, size and quality of accommodation.
It’s genuinely a good time in the market to upsize, as the discount on the property you are acquiring is generally greater than the discount on your existing property. We have seen a few recent examples of young families in the $900,000 to $1.2 million range looking to upgrade from their current two or three-bedroom strata properties in Dee Why into larger, family-friendly four-bedroom homes in Narraweena and Cromer.
A recent example includes 42 Carcoola Road, Cromer which sold for $1.69 million. The property comprises a circa 1980s, renovated, two-storey, four-bedroom, three-bedroom dwelling with in-ground pool on approximately 610 square metres, marketed and suited towards a growing family.
Another recent example is 9 Siobhan Place, Mona Vale. The property sold for $2.006 million in June 2019 (previously sold for $2.101 million in April 2017). The property comprises a renovated, two-storey, four-bedroom, two-bathroom home with an outbuilding on 696 square metre of land. The home is well-proportioned for an extended family and moments from Mona Vale village.
We are also seeing an Influx of properties catering for a multi-generational living (where more than one generation of adults occupies the same residence), whether that be via an internal self-contained or in-law style retreat or a dual-occupancy style holding. These are becoming a popular way to cost-effectively upsize your property by co-living with extended family.
A recent example is 50 Maxwell, Street Mona Vale, having received strong interest from extended families. The property sold for $2.22 million in June 2019 (slightly above the $2.2 million price guide). The property comprises a circa 1950s, renovated, four-bedroom, two-bathroom dwelling with a detached two-bedroom, one-bathroom granny flat.
Buyers in the prestige end of the market are generally looking at high-end finishes, views and proximity or frontage to the harbour, rivers or beaches. Whilst for some that may mean large mansions, the rise of prestige units is also becoming popular amongst older prestige buyers looking to downsize out of the family home.
Within inner-city Sydney, owner-occupiers in the prestige market segment generally spend in excess of $3 million and are looking for premium apartments and terraced or detached dwellings within the city or city fringe areas. This demographic largely comprises of high income thirty plus year olds and high net worth individuals.
The range of factors impacting purchasing decisions within this market is large and varied. Generally, the more resilient properties incorporate some combination of an above-average sized land component, views, car accommodation and period appeal. This demographic is particularly prominent in the inner eastern corridor of the city fringe (such as units around Hyde Park, Macquarie Street, Potts Point and along the harbour) as well as in terraced and detached houses in the suburbs of Paddington and Woollahra.
Buying a property with these factors in mind would ensure resilient pricing in calmer market conditions and premium results in stronger markets.
When it comes to the prestige sector of the market on the Lower North Shore of Sydney, the list of must-haves can become very long and understandably so considering you are paying $5 million-plus for such a property. In saying that, like every price point in the market, there are limitations to what you can expect and sacrifices to make depending on price point.
There has been a good amount of recent sales activity in the prestige sector of the market in Northbridge on the Lower North Shore. This is popular due to its central although secluded positioning and proximity to multiple highly-regarded schools. The majority of purchasers in this area are families and therefore their property demands are very specific to their stage in life. Fundamental must-haves for purchasing a prestige style home in Northbridge include a large quality family home comprising four to five bedrooms, multiple bathrooms and en suites and a high level of fit-out or recent renovation works for older, period style homes. In addition to the must-haves of the residence, ancillary improvements are also very important, with a swimming pool and landscaped grounds highly sought after at this end of the market. The consequence of the above-mentioned must-haves is the need for an adequate amount of land to incorporate the improvements and this is usually in excess of 600 square metres.
A good example of such a home is the recent sale of 2 Dorest Road, Northbridge which sold in April of this year for $5.12 million. This is a completely renovated, high quality circa 1940 residence comprising five bedrooms and three bathrooms with an in-ground swimming pool surrounded by landscaped grounds and situated on 746 square metres of land. This type of property ticks all the boxes for this sector of the market and provides an excellent example of the type of property demanded by these purchasers.
In addition to the must-haves discussed above, there are always the would-like-to-haves which every potential purchaser desires and hopes to obtain at their price point. In the suburb of Northbridge, the two attributes potentially available are water views and, less common, waterfront allotments. Waterfront properties usually come at a significantly higher price point, although some steeply sloping sites with limited direct waterfront access may be available. More common would-like-to-have attributes are water views, always dependent on the aspect and elevation of the property which can vary greatly. Although expansive Middle Harbour and bay views are scarce, restricted and filtered water views are rather common and can be an added bonus and selling point for a prestige property in the area.