Sydney July 2018

The month in review: Sydney

By Herron Todd White
July 2018

Within the wider Sydney region, residential property below the $500,000 price point is an ever diminishing market. That being said, there is still property available for that budget, it’s just that purchasers will have to sacrifice in other areas such as location, commute time, level of accommodation or the overall condition and features of properties in this price range.

Generally speaking, the further you drive from the CBD, the cheaper the real estate. This may change when Parramatta grows into the role of Sydney’s second CBD but for now the old rule of thumb still applies.

It should come as no surprise that outer western Sydney will provide buyers with the greatest number of options for the sub $500,000 price point within the Sydney region. Even here though, finding these properties is starting to become a stretch.

Campbelltown offers buyers within this price point a mid 2000s 2-bedroom, 1-bathroom townhouse or a more modern 2-bedroom, 2-bathroom unit. In Bradbury, only a short distance from Campbelltown, you can still pick up a 3-bedroom house for around $470,000 to $500,000. These would be considered secondary dwellings within the Bradbury area either located on busy roads, with irregular block shapes or in average to poor condition. Campbelltown and surrounds is circa 60 kilometres from the CBD but more importantly around 25 kilometres from the Badgerys Creek Airport precinct. This is an important feature for growth in this area in the coming years.

In Woodbine within the Campbelltown LGA, the only dwelling available for sub $500,000 is a fire damaged house on an irregular block.

Sydney 1

The Liverpool and Fairfield unit market still offers plenty of stock available for under $500,000, with the vast proportion being older style, 1960s and 1970s low rise walk-up developments. There are 2-bedroom units available for under $500,000, however these are mostly 10 to 15 years old now, with some showing their age more than others.

The Blacktown local government area offers buyers a number of options for sub $500,000. Examples include mid 2000s 2-bedroom 2-bathroom units within close proximity to the station for circa $450,000.

If a detached house is required, then buyers will have to consider less sought after areas. This is highlighted by a recent sale in Whalan of an ex Department of Housing property selling for $460,000. This house was a fibro dwelling 30 metres away from overhead transmission powerlines, without any covered car accommodation and in fair overall condition. It did have a level 575 square metre block and was adjacent to a local park. At sub $500,000, this presents a prime opportunity for first home buyers or investors to enter the market. This area is approximately 50 kilometres from the Sydney CBD, 13 kilometres from Penrith and 25 kilometres from the proposed second airport at Badgerys Creek.

Sydney 2

Within new estates on the outskirts of western Sydney, buyers with a budget of up to $500,000 can only find land. Examples would include a rectangular shaped 375 to 400 square metre parcel in Marsden Park or Austral in the south-west. Further south in Campbelltown you can get more bang for your buck with similar money buying you a circa 500 square metre block.

For even better value, buyers can head to North Richmond where for $475,000 to $500,000 you can acquire a 650 to 700 square metre regular shaped block. The commute is around 70 kilometres from the Sydney CBD and approximately 50 kilometres from both Parramatta CBD and the proposed second airport at Badgerys Creek.

On the northern beaches, a softening of the residential market over the past year has seen an increase in the number of units available in this price range. Half a million dollars will fetch you a 1-bedroom or studio unit in some locations, with units that peaked in the $520,000 to $550,000 range now selling within the $480,000 to $500,000 price range. Examples of this would include older style circa 1960s to 1970s units in Dee Why that are typically smaller than average (under 50 square metres). These are typically geared towards first home buyers and investors due to their affordability and offer higher than average yields (often around 4.5%).

Sydney 3

Alternatively, if you are looking to be situated closer to Manly, a renovated studio unit recently sold for $490,000 at 103/48-52 Sydney Road, Manly. The unit is located in a very convenient position, although at the expense of internal live size, having only a 31 square metre living area.

If you’re looking to stretch the budget and enjoy the water, a property located in the Pittwater Estuary such as Scotland Island, Great Mackerel Beach or Elvina Bay may be an option. These areas are only accessible via water services and as a result are priced significantly lower than traditional areas. They typically under perform the market and offer little investment opportunity, being geared primarily to owner-occupiers for either permanent occupation or to be utilised as weekenders.

Sales in the price range are hard to come by but they do exist, representing the bottom end of the market.

An example would include 13 Diggers Crescent, Great Mackerel Beach which sold for $535,000 in July 2017. The sale is an older circa 1950s fibro dwelling comprising of 2-bedrooms and 1-bathroom, located on an easy sloping 594 square metres with limited views.

28 Richard Road, Scotland Island sold for $665,000 in May 2018 and represents the bottom end of the Scotland Island market. The home is located on the southern side of Scotland Island offering an original timber clad, 3-bedroom, 1-bathroom dwelling, located on a moderately sloping block with some filtered Pittwater views.

Sydney 4

Sydney 5

In the southern suburbs, a budget of $500,000 would restrict a buyer to older style 1-bedroom units or an older style, over 55’s 1-bedroom villa. An updated 1-bedroom unit in a 1970s building in Searl Road, Cronulla recently sold for $500,000. The 38 square metre unit, which last transacted in 2010 for $245,000, is an approximately 750 metre walk to the railway station and Cronulla Beach.

Sydney 6

There are fairly limited options for the over 55’s market in this price range in the south, however a budget of $400,000 to $500,000 will provide an opportunity to purchase a 1-bedroom villa in a 1970s to 1980s complex in a suburb such as Sutherland, Kirrawee or Caringbah, with close proximity to railway stations and shopping facilities.

The sub $500,000 price point in Sydney is mostly made up of first home buyers and investors. These participants are generally more sensitive to price and interest rate movements. With signs that interest rates may creep higher over the next two years and banks tightening the criteria for investor lending, a flow on effect to this sector of the market is likely.

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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.