The month in review: Sydney property market update
By Herron Todd White
Location is the key factor in determining value in Sydney and we’ve considered four popular suburbs in different parts of the city. These suburbs aren’t necessarily the most expensive suburbs in their parts of the city but are well regarded and provide some decent beer budget or entry level opportunities.
Inner City Property Market
Paddington is well regarded as a result of it being a well-preserved conservation area for Victorian architecture which is in demand and a lack of supply. Furthermore, close proximity to quality schools, the CBD and Bondi Junction only broadens the appeal of this suburb.
The median house price in Paddington for 2018 was $2.35 million, with the median unit price coming in at $920,000 (realestate.com.au). A recent sale at just under the median price was 32 Napier Street which sold in January for $2.13 million. The property is a renovated Victorian terrace with three bedrooms, two bathrooms and rear single carport on a 158 square metre lot. At the unit median price, 1/56 Ormond Street, an updated, 68 square metre, two-bedroom, one-bathroom Art Deco unit with no parking, sold in January for $915,000.
Looking at cheaper or entry level options, units provide the best option. An original 1970s, 43 square metre, one-bedroom, one-bathroom unit at 206/176 Glenmore Road sold in January for $617,500. The unit did have a car space although you are compromising on size, condition and the period appeal that other properties in the area provide.
Another example is that of 29/8 Bennetts Grove Avenue which sold for $880,000 in February. It is a split-level two-bedroom, one-bathroom unit with a nice outlook and parking. Surprisingly, it’s in liveable condition, although ideally you would want to update. With this unit you are again forgoing the period appeal and size for a two-bedroom unit, with the living area around 60 square metres.
Are the compromises worth it? Absolutely, if you want to be in the heart of the action. You’re buying into a premium and highly liveable suburb for well under a million dollars, with the added bonus of a parking space. Even a basic renovation would greatly increase the appeal of these units.
When it comes to units, the quality of the complex makes a big difference. Unit blocks of owneroccupiers are typically more well maintained and have facilities such as pools, gyms, visitor parking and concierge. Often period blocks with a high number of owner-occupiers are well preserved, further enhancing their value.
The dwelling market within the inner city is largely dominated by owner-occupiers, however some investor activity does occur. Those properties targeted by investors tend to be on smaller parcels of land and often forgo parking. If they are terrace properties they commonly have a narrower frontage.
As one would expect, investors target lower maintenance, higher yielding properties, often leaving out extras such as common amenities, larger yard, parking or updates to improve their overall return on investment.
Northern Sydney Property Market
Northbridge is an established suburb located approximately 6.5 kilometres north of the Sydney CBD, on Sydney’s Lower North Shore. It is a highly regarded suburb with a mix of housing styles, with the most prestigious properties positioned on waterfront land and orientated to incorporate expansive Middle Harbour views.
On the affordability scale, Northbridge does not often get a mention, having a median house price in 2018 of $3.18 million (realestate.com.au). It must be noted however that this median price is down from $3.49 million in 2017, although still not quite in the affordable category for the majority.
Obviously some serious sacrifices are going to have to be made if you want to live in Northbridge on a beer budget. Waterfront positioning and expansive water views are out of the question, with thoroughfare roads and dated dwellings being the compromises that will have to be made. A very recent sale occurred in Northbridge in January of this year which presents a very good example of such a property. 27 Strathallen Avenue, Northbridge sold on 23 January 2019 for $1.7 million after being on the market for a reported 140 days (RP Data). Strathallen Avenue is a main thoroughfare and the sale comprised a dated circa 1920 dwelling in need of a full renovation. It is also noted that the allotment of this property is of slightly irregular shape and is terraced at the rear, reducing the overall usability of the land.
Entry level properties within such a well-regarded suburb, such as 27 Strathallen Avenue at almost half of the median price in Northbridge, surely must have long-term prospects. The main thoroughfare cannot be removed, but the allotment could be better utilised with development of the dwelling to incorporate the above-mentioned irregularities. There is also rear street access to the property, reducing the access issues of being positioned on a main road and also providing the potential to add a studio at the rear (subject to council approval). If these positive attributes can be capitalised upon, then it is worth making the sacrifices to be within this champagne suburb on a beer budget.
Western Sydney Property Market
In north-western Sydney, Castle Hill is seen as a desirable location and a suburb many locals aspire to live in. This suburb provides a variety of real estate, but houses begin from $1.2 million for entry-level dwellings to executive style mansions at between $3 million and $4 million. The main draw cards are high quality schools, larger blocks, quiet leafy streets and close proximity to a major shopping centre, bulky goods precinct and the Norwest business park. In addition there are two new train stations being built within the suburb.
The median value in Castle Hill for houses in 2018 was $1.4 million (realestate.com.au). For that sort of money, you can get an updated four-bedroom home on a decent parcel of land with potentially a pool. The house pictured recently sold for $1.35 million and provides four bedrooms, three bathrooms, double garage and a pool on a 923 square metre block.
An example of a high-end property is this sixbedroom, six-bathroom executive dwelling with an eight-car garage. This home features high quality inclusions with an in ground pool all improved on 2,000 square metres of landscaped land. This property sold for $3.8 million in June 2018.
The absolute entry level for dwellings in Castle Hill is the sub-$1 million market. Any dwellings under this mark have a number of less desirable features, but for the savvy purchaser, present a foothold in the market. The dwelling below sold for $940,500 in January. It provides three bedrooms and one bathroom with a built-in garage. Overall the property is in below average condition and is positioned on a 696 square metre corner block.
The compromise for buying this property is being located on the outskirts of Castle Hill and the dwelling is in need of attention which could be costly. Is it worth it? It all depends on what you want. Some people want a detached house they can add value to and escape strata living. Others may wish to spend similar money on a more modern townhouse offering the same or maybe more accommodation with superior features throughout.
Long term, land in Sydney will become more valuable and having 700 square metres in Castle Hill should prove to be a smart decision. In the past five years, dwellings in Castle Hill have risen 52 per cent. This came off the back of a huge price boom in Sydney. Whilst the median has dropped in the past 12 months, Castle Hill in the long term is seen as a wise move given the solid fundamentals and major draw cards that underpin the area.
Southern Sydney Property Market
Oatley is a quiet, well-regarded suburb in the St George area, positioned on the northern foreshores of the Georges River, just to the south-west of Hurstville, and approximately 18 kilometres south of the CBD. It benefits from a train station on the Illawarra line, a popular shopping strip and bus services, along with close proximity to the major shopping precinct at Hurstville. All these attributes make Oatley a suburb great for families and popular for both owneroccupiers and investors.
The median house price for Oatley in 2018 was $1.7 million, while the median unit price was $835,000 (realestate. com.au). A sale just above that median price was of 26 Douglas Haig Street, which sold in November for $1.821 million. The property comprised an updated, 1960s, single storey brick home with three bedrooms, two bathrooms, garage, carport and in ground pool on 697 square metres of land.
Oatley is a suburb of extremes when it comes to property prices, with large waterfront homes achieving $3 million-plus and in some cases $4 million-plus, while at the other end of the scale, there are a number of unit complexes which provide opportunities for first home buyers and investors. Entry level for an original 1960s twobedroom, one-bathroom unit with one-car garage is between $650,000 and $700,000, with most of these complexes located within close proximity to the railway station and shops.
At the entry level for houses, 9 Boundary Street sold in November for $900,000. The sale provided a small 1960s, single level, weatherboard home with three bedrooms and two bathrooms in updated condition with carport and above ground pool.
The compromise here however was a smaller than average block of land at 487 square metres and being located on a busy local thoroughfare and further from the railway station and shopping precinct. This type of property can provide a good opportunity in a declining market as prices for properties with secondary attributes often see the largest declines. Whilst that makes these types of properties slightly riskier, they are still a good option if they are located in a popular suburb such as Oatley.
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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.