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Despite property prices continuing to rise in Australia, with a little imagination and foresight, buyers can still find a slice of luxury in Sydney with room to appreciate in value. 
Sydney is outpacing national averages for recent price growth, according to real estate data firm CoreLogic Australia. The city’s 3.8% increase in dwelling values during the three months prior to August surpasses both the 2.5% national average increase, and the Australian state capitals’ combined average of 3.1%. (Only Queensland’s capital, Brisbane, was higher at 4.2%.)
Despite housing stock slowly rising across Sydney, it’s still trending below the historic five-year average, said Eliza Owen, CoreLogic’s head of Australian research. Heading into spring new listings were 15.7% higher over a year prior, while the median number of days on market has dropped from 36 to 29.
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Zac Rabin, associate director of Sydney real estate agency the Rubenstein Group, said that the luxury real estate sector isn’t facing the challenges interest rates pose to the overall market. “There’s always high demand for luxury properties in the areas that we service because of the low stock levels,” Rabin said. Higher-earning luxury buyers are also less sensitive to the financial challenges experienced by wider swaths of buyers.
In early September, Australia’s central bank announced its cash rate remained unchanged at 4.1%—its highest since mid-2012—in an effort to temper inflation, which analysts do not expect a return to 2%-3% target levels until 2024 or 2025.
“There’s a clear mismatch between housing supply and demand,” said Owen, partially because of a building shortage in Sydney. She added that Sydney could experience “a price boom” when interest rates eventually decline. In September, CoreLogic reported median house prices were A$1.36 million (US$870,700), a 1.3% annual increase.
“Looking at the relatively low-priced pockets of Sydney’s most desirable, blue-chip markets is a great way to identify capital growth potential,” she added. These three Sydney suburbs offer luxury buyers opportunities to blend amenities, potential for future value growth with proximity to the heart of the Harbour City.
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Bondi Junction
Nestled in Sydney’s Eastern Suburbs, Bondi Junction is the city’s fifth-largest business district. Located only 6 kilometers from the central business district, it is known as a luxury retail destination and the transport hub for the east of the city.
Though set back from the coast, residents can walk from the suburb’s center to the sands of world-famous Bondi Beach in approximately 30 minutes.
As of August, Bondi Junction had a median house value of A$2.8 million, an increase of 3.2% in the prior three months, according to CoreLogic. This put it 36% below the broader North Eastern Suburbs market. In the nearby suburb of Bondi, (between Bondi Junction and Bondi Beach), median house value jumps to nearly A$4 million.
The housing stock isn’t all luxury, reflecting the area’s working-class roots. “The suburb is characterized by older terraces and detached bungalows, but this only adds to the immense value-add potential of the houses in the area,” Owen said.
Rabin notes many luxury properties in Bondi Junction are apartments, which can feature attractive city and harbor views. Often, he said, a driver for buyers moving there is downsizing from neighboring suburbs like Dover Heights, Rose Bay or Vaucluse.
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Centennial Park
Located between the city and Eastern Suburbs beaches, Centennial Park is known widely for its public parklands that attract about 30 million visits each year.
“Centennial Park units stand out as the only dwelling market on the list where the median value currently sits below A$1 million,” Owen said. This is despite home prices surging 8.8% in the year through August. 
“The point of difference of Centennial Park is you get large level blocks of lands,” Rabin said. “Whereas in other areas like Rose Bay, Dover Heights, Vaucluse, they tend to be quite hilly.”
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Cameron Airlie, a sales executive and partner with Sydney-area real estate agency NGFarah, said Centennial Park’s popularity exists, in part, “because some homes there are so grand,” featuring 1,000- or 2,000-square-meter lots with tennis courts.
Historically known for older residents, Rabin said Centennial Park homes are attractive to younger families looking to make upgrades for long-term living and enjoy the proximity to parks and excellent schools. In 2020, the Australian Financial Review reported there were “just over 100” freestanding homes in the suburb which may sell only once a generation.
The catch with Centennial Park is that the unit stock is not “traditionally luxury.” Many dwellings below median value are one-bedroom, in larger or older buildings, or combine these features, Owen said. “However, with the right aspect and a nice cosmetic update, these units can feel like a small piece of luxury in one of the most convenient suburbs in Sydney,” she says.
Between Bondi Junction and neighboring Centennial Park, Rabin said he expected to see better price growth in the latter as Centennial Park has stronger demand because of fewer properties. In Bondi Junction, there’s historically an oversupply of apartments as developers have demolished freestanding homes to construct towers. 
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Little Bay
“Little Bay houses also stand out as a unique bargain when it comes to Sydney’s more upmarket property,” Owen said. With a median house value of A$2.33 million, it sits below that of the overall Eastern Suburbs-South market. Little Bay’s housing market dipped about 10% in value over the past 12 months to August, creating a unique buying opportunity.
“We’re finding that the biggest growth in Sydney are the areas that are walking distance and close proximity to the beaches,” Rabin said. For instance, median house values in Maroubra, a beachside suburb to the north of Little Bay, only dropped 2% in value over 12 months, then rising over the three months prior to August by 3.2% to A$2.7 million
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Despite a prime location, just a 20 to 25 minutes drive from the CBD, and surrounded by coastline, Little Bay did not always entice buyers. “Through to the 1980s, the Little Bay area was pretty unpopular, as the beach there was heavily polluted,” Owen said. While today, the beach water is clean due to outfall operations, the suburb lagged others in population growth and property development. “A lot of the houses there are fairly recently established,” she added.
Within Little Bay there are two key markets, Airlie said: Little Bay itself and the insular, master-planned Prince Henry neighborhood. Built on a coastal former hospital site, Prince Henry is a 330,000 square meter mix of 1,000-plus variously styled dwellings, 19 renovated heritage buildings and assorted community amenities. While he said top prices run about A$4.5 million in Little Bay outside Prince Henry, the figure nearly doubles inside.
“People obviously are drawn to Little Bay because it’s a bit more spaced out,” Airlie says. The market is predominantly houses and semis. Many homes have spacious yards around 600 square meters, double those in comparable suburbs. There are also several nearby golf courses for enthusiasts.
“It’s a very family-oriented suburb,” Airlie added, noting there is little retail or other commercial tenants.
Owen noted that bigger luxury properties with “contemporary, stylish design,” like white weatherboard cladding, can attract above-median prices. “This is another market where there’s a lot of potential that could come from renovation.”
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DISCLAIMER: The currency conversion is provided for illustration purposes only. It is meant only as an approximation based on the latest information available and should not be relied upon for any other purposes. We are not responsible for any loss that you may incur as a result of relying on these currency conversions. All property prices are as stated by the listing agent.


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