Demand solid in the city and east
By Brad Caldwell-Eyles
Brad Caldwell-Eyles comments on City and East's premium surburbs in this article written by Kate Farrelly from Domain.
Domain property guide 2016: Demand solid in the city and east’s premium suburbs
If you own property in the eastern suburbs, give yourself a pat on the back. Not only does this coveted corner of Sydney claim some of the country’s most iconic homes and spectacular views, it also records the highest median property prices.
Double-digit growth of between 10 and 25 per cent last year pushed the final sub-$1 million suburbs over the line, so that today the suburbs that make up the city and east boast median house prices between $1 million and $8 million.
There are still a handful of suburbs where the unit median falls under $600,000 but with new apartment developments on the rise across the city, local agents say their days are numbered.
At Frasers Central Park development, 219 of 313 apartments released in 2015 were sold, exceeding expectations. “It was pretty manic last year, we certainly saw a large appetite for off-the-plan,” says Paul Lowe, sales and marketing director for Frasers Property. “It was fuelled in part by foreign investment and a good local market that was worried that unless they bought in they could miss out.”
Lowe says the company has a positive outlook for 2016 in what is a “plateauing or slow growth market”. “This year will come off in terms of its growth curve but in the key areas we’re still seeing solid demand.”
BresicWhitney director Shannan Whitney says excessive price rises in recent years have led to Sydney’s lowest gross rental yields, which combined with the supply pipeline of new apartments will stall unit price growth. Whitney says house prices should hold provided the low interest rate environment prevails.
Executive chairman of the Raine & Horne Property Group, Angus Raine, says home values near the new metro stations at Barangaroo, Pitt Street and Waterloo should continue to rise, while 1st City principal Brad Caldwell-Eyles has his money on Potts Point, where one new development has set a new Sydney record for the apartment price per square metre.
Managing director of CBRE Residential Projects David Milton reports 97 of 134 apartments have sold off-the-plan in Omnia, the Greenland Group’s luxury Potts Point development that has secured a top sale of $11 million, or $62,000 a square metre. “Potts Point is an area where locals recognise value and scarcity,” says Milton. “We knew Omnia would have high demand because we had large numbers of high net worth buyers contacting us before the launch to say we’d like to buy in”.
Belle Property Surry Hills director Charles Touma thinks Darlington and Rosebery have room for growth. “Darlington is a bit of a forgotten suburb, yet it’s so close to everything,” he says. “And I think house prices in Rosebery still represent extremely good value.”
Double Bay is another favourite for 2016. Caldwell-Eyles was surprised to find buyers fighting over a $2.75 million apartment being offered off-the-plan in the Bay Residences with no views and just one car space.
BradfieldCleary director Georgia Cleary is also expecting further price rises in the suburb. “Double Bay was our strongest market last year,” she says. “Ever since the opening of Woolies and the redevelopment of the different shops and restaurants around it, it has increased in popularity. “It used to be considered more for an older demographic, now there’s been a massive swing to the younger generation who come for the night life. I think it will be a top performer again this year.”
Ray White Group chairman Brian White isn’t surprised by the surge in popularity of inner city suburbs. “In previous property cycles there’s been all this talk of people moving to the newer suburbs and the inner city has been ignored to a degree, but in the last five years the power of the inner city property market has just been staggering.”