We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.
Add articles to your saved list and come back to them any time.
Sydney’s property market is picking up overall, but the median unit price in some suburbs is lower than it was five years ago.
In neighbourhoods where new apartment development has outpaced demand, prices have come under pressure, Domain figures show.
The median unit price in Rushcutters Bay is lower than five years ago.Credit: Flavio Brancaleone
In other areas, a wave of resales of smaller, entry-level units rather than higher-priced stock has brought down the average.
The steepest fall was in Rushcutters Bay, where the median unit price over the year to June was $690,000, down 19.4 per cent from five years earlier. The harbourfront neighbourhood includes a significant stock of smaller, studio or one-bedroom units, and their growth prospects can be limited.
It was followed by Chippendale (down 19.2 per cent in five years to a median of $727,500) and Blacktown (down 18.9 per cent to $430,000).
Eastgardens, Harris Park, Eastwood, Rosehill, Wiley Park and Rosebery recorded falls of 16 per cent or deeper.
Buyer’s agent Rich Harvey said many neighbourhoods on the list were affected by a high supply of apartments either within the suburb or nearby, such as Harris Park, Rosehill, Merrylands and Granville. Competition for rentals was not as strong as elsewhere, he said.
“I would say to any buyer, you really need to have a clear understanding of the volume of new developments coming into these areas,” he said.
“If there’s going to be 1000 apartments built or 2000 apartments built – which could be built with the new densities – that has an immediate dilution effect on the price of your property.”
He suggested buyers look for boutique blocks with good light, ventilation and balconies, not less than 60 square metres for a one-bedroom.
He backed the NSW government’s push in this month’s budget to improve housing supply and affordability.
“We’re chronically undersupplied in properties at the moment so building more apartments is a good thing,” he said.
A report last year from the Productivity Commission found housing would be more affordable if more homes were built.
Some owners have been forced to sell their properties at a loss.
A two-bedroom Blacktown apartment sold for $405,000 in June. It previously traded for $425,000 in 2015, records show.
A studio in Rosehill sold in April for $175,000, more than its last sale price of $170,000 in 2021, but that trade was less than its 2016 sale price of $212,000.
A Merrylands two-bedder sold for $482,500 this month, and last traded in 2016 for $587,000.
Rushcutters Bay may seem a surprising inclusion on the list, but Richardson & Wrench Elizabeth Bay Potts Point’s Angelo Bouras noted the difference between its studios and newer high-end residences.
“A lot of those higher-end apartments have not been trading and what we’ve seen is a lot of turnover with the investor stock, circa $500,000, $700,000 – that’s been trading a lot more,” he said.
He said about five years ago there were a significant number of transactions in a higher-end new build that would have boosted the suburb’s average price at that time.
Westpac senior economist Matthew Hassan said the combination of the COVID-19 pandemic, where buyers sought houses for more space, and issues over building defects had made units less attractive.
However, prices could start to turn around amid a broader lack of homes for sale.
“If you’ve got such critical supply shortages people will come back to higher density,” Hassan said. “The question is at what point does the aversion to living and owning higher density start to ease? It will take a while.”
Quantify Strategic Insights principal Angie Zigomanis said higher interest rates and higher mortgage repayments were also having an effect on the more affordable end of the market.
Strathfield’s median unit price is lower than five years ago.Credit: Louise Kennerley
Changes to the rules for international buyers had also hit Sydney property prices.
He said some types of stock were performing better than others. Two-bedroom, two-bathroom apartments were selling better than those with a single bedroom, he said.
Zigomanis expects unit prices to rise, especially as houses become more expensive.
“I think to some extent there will be a pick-up in unit prices – people are being priced out of certain markets and they’ll look to a unit instead,” he said.
Michelle May, of the eponymous buyer’s agency, said prices fall when the increase in supply of units outstrips buyer demand.
She said the most hotly contested units are three-bedroom apartments that suit young families.
“A lot of people are staying longer and longer in strata because they can’t afford to take the next step,” she said.
“There are simply not that many three-bedrooms around.”
She cautioned buyers hoping for capital growth to look for rare homes with scarcity value, such as in medium-density rather than high-density neighbourhoods, as well as checking how the building has been maintained and which aspect it faces.
Copyright © 2023


%d bloggers like this: