CoreLogic National housing Update March 2018
March Market Outlook
Getting a mortgage for an off-the-plan property
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Adelaide March 2018
Brisbane March 2018
Canberra March 2018
Darwin March 2018
Gold Coast March 2018
Melbourne March 2018
Newcastle March 2018
Perth March 2018
Regional NSW March 2018
Regional NT March 2018
Regional QLD March 2018
Regional VIC March 2018
South West WA March 2018
Sydney March 2018
Tasmania March 2018
Wollongong March 2018
Should you flip your property?
CoreLogic NSW housing Update March 2018
CoreLogic QLD housing Update March 2018
CoreLogic SA housing Update March 2018
CoreLogic VIC housing Update March 2018
CoreLogic WA housing Update March 2018
5 hacks for breaking into the property market
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Should you flip your property?
Sydney March 2018
The month in review: Sydney
By Herron Todd White
In Sydney, the middle ring is traditionally considered to be the area that falls within a radius of more than ten kilometres and less than 20 to 25 kilometres from the central business district. At around ten kilometres from the CBD are suburbs such as Rockdale, Strathfield, Matraville, Ryde and Manly. Moving out to around 20 kilometres you find Parramatta, Revesby, Sylvania, Hornsby and Warriewood.
The middle ring of Sydney has a diverse range of property types and price points, usually dependent on access to jobs, transport links and other services and amenities. Historically this was an area popular with first home buyers and young families looking for detached housing with a big back yard, however recent price movements have meant these buyers have largely been priced out of these areas. They now must look further afield or consider higher density housing options which are becoming more readily available throughout many middle ring suburbs.
The suburb of Ryde is approximately 15 kilometres from the Sydney CBD with access to local amenities including the recently refurbished Top Ryde Shopping Centre, Macquarie Shopping Centre and close proximity to major industrial and business precincts. Dwelling types range from older style 1950s homes through to modern built homes.
The area has a median house price of $1.758 million and performed strongly in 2017 with 17.2% capital growth. The area has a relatively modest median unit price of $725,000 and a smaller 6.4% capital growth in 2017 (source: PriceFinder).
Rental demand remains steady in the housing market, with most houses available being typical older style homes with a modest level of accommodation and fit-out. The average median rent is $690 per week (source: realestate.com.au) and appeals predominantly to younger families.
The unit market has become saturated with stock of late, which has seen a slight reduction in listing prices and longer than average days on market. The median 1-bedroom unit rental is $490 per week (source: realestate.com.au) reflecting a 4.1% yield and appeals mainly to singles and childless couples.
Older units in established locations where supply levels remain steady have performed well over the period, however the area faces over supply challenges of new stock, particularly on the fringes of Meadowbank/Ryde where a significant amount of supply has come onto the market over the past 12 to 18 months. There are currently 52 1-bedroom units and 90 2-bedroom units on the market (source: realestate.com.au). Over recent months, the market has remained relatively stable or shown slight levels of decline in value levels. Original off the plan sales from 2014 and 2015 have seen limited price growth. Examples of this include 132/21-31 Porter Street, Ryde which sold off the plan in November 2014 for $588,000 and recently resold in December 2017 for $570,000.
Whilst the suburb lacks a railway line, it has frequent bus services available and the area is relatively affordable in comparison to some of its neighbouring suburbs including Gladesville ($2.1 million median house price), Eastwood ($1.86 million median house price) and Putney ($2.37 million median house price) (source: PriceFinder).
The suburbs of Narrabeen and Collaroy are both considered middle ring suburbs of the northern beaches. Whilst centrally located between Palm Beach and Manly geographically, they are also a middle point in terms of value levels. With median house prices of $2.1 million and $2.3 million respectively, they sit well between the median house values of Manly ($3.26 million) and Mona Vale at $1.75 million (source: PriceFinder).
The housing marking in Narrabeen performed strongly with 13.2% capital growth (source: PriceFinder) for the 2017 period. Demand in the northern beaches is very much owner occupier driven which results in a limited amount of rental stock available. Narrabeen provides a rental yield of 2.1% (source: realestate.com.au) with housing generally comprising of a modest level of accommodation and fit-out, appealing primarily to younger families looking to remain on the northern beaches at an affordable level.
The biggest challenge to the northern beaches market, particularly in the middle ring, has been road and public transport links, particularly to the CBD.
The B-Line bus service has been recently introduced to help provide a more reliable journey between Mona Vale and the Sydney CBD. The NSW Government has introduced a new fleet of double decker buses and is in the process of upgrading infrastructure along Pittwater Road, as well as providing six new commuter car parks to Mona Vale, Warriewood, Narrabeen, Dee Why, Brookvale and Manly Vale. In addition the new $600 million Northern Beaches Hospital which is due to open in October 2018 should provide positive impact to value levels in the area. The proposed future Beaches Link tunnel would also make this area more accessible and place upward pressure on house prices.
Overall the long term prospects are positive for this sector of the market due to the strong owner occupier appeal for middle ring beachside localities along with future infrastructure.
Strathfield and Burwood are located approximately 13 kilometres west of the Sydney CBD and approximately 12 kilometres east of the Parramatta CBD. Dwellings in both areas come in a wide variety of styles, including older Victorian terraces on 150 square metre lots, Californian bungalows on 1,000 square metre lots and large Federation homes on 2,000 plus square metre lots. These suburbs are in very strong demand from owner occupiers, resulting in strong median prices and attracting professionals with young families. The suburbs have access to main roads such as the M4 motorway, Parramatta Road and future M4 East tunnel, as well as major railway stations on the main central line. Access to prestigious schools such as MLC, Santa Sabina, Meriden, Trinity College and St Patrick’s College adds to the high demand for dwellings in both suburbs.
The start of 2017 was strong but began to slowly taper off towards the middle and end of the year in parallel with the Sydney market as a whole. The median house price for Strathfield in 2017 was $2.56 million, a slight increase of 0.4% over 2016, while for Burwood it was $2.11 million, up 5.5% from the previous year (source: PriceFinder). Despite slowing price increases overall, unique character style dwellings continued to perform well, along with modern dwellings on larger lots.
Opportunities to enter this market are limited because of the price point. As a result potential purchasers are pushed to suburbs such as Strathfield South, Concord, Enfield and Croydon.
We expect that 2018 will see the market overall in both suburbs continue to level off with results to remain steady. However unique and brand new dwellings will continue to be in strong demand.
The Strathfield and Burwood unit market has seen strong growth in recent years with an increase in medium rise unit complexes around both stations. The median price for Strathfield units in 2017 was $730,000, an increase of 2.1% over 2016, while the Burwood median unit price increased by 1.1% to $830,000 over the same period (source: PriceFinder).
Rentals have remained strong throughout this construction boom with a strong amount of supply absorbed by investor demand both locally and internationally. A modern 2-bedroom, 2-bathroom unit with one car space situated opposite Burwood Station can achieve $700 to $750 per week rent, with a yield of around 3.5%.
The majority of buyers are investors and young couples. Overseas buyers, who previously dominated the market, are becoming less prevalent. However there are now significant traffic issues around both Strathfield and Burwood centres, especially around Burwood Road, Burwood and Raw Square, Strathfield.
Opportunities to enter the market are reasonably affordable with proximity to large shopping centres, local shops, cafes, stations, parks and schools again seen as a major reason for the recent strong demand. With the increase in the number of developments in Burwood, especially along Burwood Road, it may become more affordable to enter the market in 2018 if prices continue to ease.
Sandringham and Kyeemagh are two small residential suburbs located at either end of the main foreshore along Botany Bay. These are smaller suburbs which neighbour the more wellknown Kogarah, Brighton Le Sands and Sans Souci. Property types in this area generally include freestanding houses, villas, townhouses and low rise units with a movement towards duplexes and larger unit complexes surrounding facilities.
The area is well known for its restaurants and cafes, foreshore parklands and of course long stretches of sand fronting Botany Bay.
The locality is well serviced by buses and provides quick access by train from the nearby suburbs of Kogarah and Rockdale to Sydney Airport and Sydney CBD. Rocky Point Road and The Grand Parade provide vehicular access to the eastern suburbs and the CBD to the north and to the Sutherland Shire in the south. The M5 Motorway is also accessible from nearby Arncliffe.
Due to these factors, there is demand from young professionals and families. Opportunities to purchase for this demographic exist with freestanding homes along with modern medium to high density developments. An example of this is Ramsgate Park, a planned community currently under construction to comprise over 500 apartments sitting on 3.3 hectares and offering extensive green space areas.
A recent sale in the area was 43 Riverside Drive, Sandringham which sold for $2.925 million in September. The property was an original circa 1960s 3-bedroom home with a north to rear aspect and expansive Georges River views from the front of the home.
Another noteworthy sale was 38 Alfred Street, Ramsgate Beach in December for $2.175 million. The property was a dated single level home located on a level 898 square metre block, one street back from The Grand Parade and was marketed as having potential for dual occupancy development.
A typical property in the area is generally a 2- or 3-bedroom villa or townhouse which ranges in value from the mid $800,000s to the early $1 million, or a basic 3-bedroom bungalow from $1.3 million upwards.
Properties classed as units on realestate.com.au which also include villas and townhouses, recorded an annual growth of 10% in 2017 and a rental yield of 3.1%. Houses recorded an annual growth of 12% and a rental yield of 2.3% (source: realestate.com.au).
Demand in the area is for the most part driven by owner occupiers and this is expected to continue throughout 2018.
Planned infrastructure improvements include upgrades to the nearby Princes Highway. Another proposal is a light rail system along the foreshore and up Rocky Point Road to join the existing rail network at Wolli Creek, both of which would ease traffic congestion significantly.
Stage 1 of The F6 Extension between the WestConnex at Arncliffe and President Avenue in Kogarah has been approved with construction planned to begin in 2019. Stage 2 through to Taren Point and Stage 3 to Loftus, if approved, are planned to be completed by 2025. This will take pressure off existing local roads and will have flow on effects to the area, including property prices.
The eastern suburbs middle ring generally refers to its most southern suburbs such as Little Bay, Philip Bay, Chifley, Malabar, Matraville, Hillsdale, Botany, Pagewood and Maroubra. These suburbs are approximately between eight and 13 kilometres to the south-east of the Sydney CBD being surrounded by Botany Bay to the south and the South Pacific Ocean to the east.
The property types within these locations generally comprise of a mix of older style detached and semidetached housing, older style to modern style low rise units, modern duplex units and higher density medium rise unit developments.
Duplex properties have become popular in these areas as a more affordable alternative to traditional detached housing. Typical duplexes sell between $1.5 million and $2 million, however larger, high quality duplexes have achieved into the mid $2 million range. An example of this is 23A Finucane Crescent, Matraville, a 4-bedroom, 2-bathroom company title duplex with single garage and in ground pool, which sold in December for $2.27 million.
These areas have generally seen strong growth over the past few years with 2017 seeing a more stable growth rate. The rental market has seen demand remain steady with slight increases in some property types. Proximity to transport has always been a major factor in these areas with only bus services available. The new Sydney Light Rail which is currently under construction is planned to open in early 2019. Currently its final stop along the Anzac Parade route will be at Kingsford however there is potential for this light rail to continue further south in years to come.
A project currently under construction in the Pagewood area (approximately eight kilometres south-east of the Sydney CBD) is the Meriton development known as Pagewood Greens. It will be the largest new residential project in the eastern suburbs and a face changing one for Pagewood. This will be developer and Meriton group founder Harry Triguboff’s biggest project. The 16.5 hectare site adjacent to Westfield Eastgardens will comprise a $3 billion community developed over several stages, with a mix of medium rise towers of up to 20 levels, over 3,000 apartments, two hectares of parkland, tree-lined boulevards and a civic square for alfresco dining.
The current prices (according to the Meriton website) for the available stock range from $700,000 to $933,000 for 1-bedroom units, $945,000 to $1.237 million for 2-bedroom units and $1.255 million to $1.625 million for 3-bedroom units. Retirees and downsizers are expected to be the predominant demographic groups for this project with some young families and professionals. The first stages are due to be completed between March and May 2018. Price growth will be dependent on the quality of future road and public transport infrastructure upgrades to the area.
The long term prospects of these areas of the eastern suburbs is looking bright. With many priced out of the northern harbourside and beachside locations, these areas are set to continue to entice more people to these areas.
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.