Yahoo Finance Rising house prices: 5 Sydney suburbs that will lead the charge
Now that the threat of Labor’s proposals to negative gearing and capital gains tax is out of the way, property investors are expecting house prices to pick up as early as the end of this year.
Already, auction rates have jumped off the back of the federal election result.
However, not all suburbs are made equal: when property values do rise again, some will rise before others.
“The facts are that certain fundamentals ensure some suburbs react before others when prices begin rising again,” said Buyers Domain principal Nick Viner.
“Given recent developments, there’s an expectation Sydney property will rebound sooner rather than later – but it can be tough to pick exactly when for most buyers and no one has a crystal ball.”
Canny investors should keep an eye out for rising prices in a handful of Sydney suburbs for an indication of an upturn in the property market.
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The five suburbs chosen are all within a 10-km radius of the Sydney CBD, and they’ve seen the most dramatic price drops in the last year. Near-city suburbs are historically “the most reactive when prices turn around,” Viner said.
He also considered price-growth drivers like infrastructure and facilities when selecting suburbs.
“Knowing which suburbs to watch means you’ll be ahead of the general market upswing.”
These are the five leading-indicator suburbs to watch out for:
1. Glebe
Glebe has close access to lifestyle and facilities, and is only a stone’s throw away from Broadway, Haymarket, and the CBD as well as Sydney’s top universities.
The inner-city suburb is popular with a range of purchasers, from first-home buyers to families looking to upgrade or downsize.
When house prices turn around, Glebe will be one of the first to benefit, Viner said.
“Glebe ticks so many boxes, yet a property price retraction of around 17 per cent over the past year to reflect a median of around $1.6 million shows it’s well below its peak.”
2. Redfern
Redfern has come a long way from its blue-collar roots, if rising house prices are any indication of the suburb’s gentrification, Viner said.
But the property value drop of around 16.8 per cent to an average price of $1.39 million over the last year means the ‘boom premium’ is over.
On top of this, new infrastructure in Redfern and Eveleigh is enhancing the suburb’s appeal, with the Commonwealth Bank moving 10,000 staff to a new building in South Eveleigh (formerly the Australian Technology Park) as one driver of demand.
Redfern Station is also set to get further upgrades, which will improve convenience for commuters, Viner added.
“It will definitely be one to watch as among the first for value increases.”
3. Lane Cove
This suburb sits 7km from Sydney’s CBD in the Lower North Shore and is a major commercial centre for the district, Viner said.
“Lane Cove saw property price falls of around 16.6 per cent over the past year with a
median that now sits at approximately $1.8 million.”
Lower North Shore families will be among eager buyers jumping back into the market as they look for homes that are close to schools, shops and transport, the property advisory firm principal said.
4. North Bondi
Property prices in Sydney’s eastern suburbs saw the least dramatic falls and were indeed “highly resilient,” Viner said.
North Bondi’s house values saw a substantial drop of 16.4 per cent in the last year. And while the median property price of $2.533 million is “still fairly steep”, it will be among the first to move.
“Stock and prices have tightened considerably since last year – even in recent months. Good
luck now if you are looking for a house in North Bondi under $2.5 million!”
5. Leichhardt
About 5km from the CBD, Leichhardt is considered one of the more “accessible” suburbs within a 10km radius of the business district.
“Leichhardt’s property prices fell by around 15.8 per cent in the last year – and its median
property price of $1.28 million actually put it among the more affordable suburbs this close to town,” Viner said.
For those looking to re-enter the property market, such as home-buyers, small families and down-sizers, Leichhardt is an attractive option, he said.
Additionally, and ironically, today’s buyers can actually profit from the nearby WestConnex project, he added.
“The uncertainty of WestConnex may have had an impact upon some properties affected by tunnels and other construction, but as the project nears completion, this is likely to be less of a factor in the future and could, in fact, boost values.”
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