Sydney Property Market Update March 2020
Metropolitan Sydney continues to change and adapt to accommodate an ever-increasing population.
Over the past five to ten years in particular, we have seen shifts in demand for various styles of housing driven by different sectors of the market. In general, there has been a trend towards smaller, low maintenance property both in terms of improvements and land size. This shift has largely been driven by two markets from the opposite ends of the spectrum. Young professionals or new families tend to gravitate towards low maintenance property to allow more time to focus on building careers, fostering a young family and in many instances, a combination of both. At the other end of the spectrum, empty nesters who are either retired or approaching retirement have moved towards this style of living to allow for a simpler life and more time to reap the benefits of their hard work. Broadly speaking, low maintenance property for these two sectors of the market include residential units, duplexes, townhouses, over 55s developments and either compact detached or semi-detached dwellings on sub 450 square metre allotments. There has been a strong focus on new unit developments along existing transport corridors, with high density housing often replacing ageing, rundown and unused commercial or industrial property.
Another driver of shifting demographics and changes to buying patterns is flexible workplaces and improved technology. This is allowing for more and more professions to incorporate working from home, either on a full or part-time basis.
The Blue Mountains, for example, continues to attract families and professionals from the Sydney basin. With large family dwellings and large garden blocks available for the cost of a unit in many areas, people are relocating to get more bang for their buck and take advantage of flexible working arrangements. In some instances, people are relocating further afield to larger regional towns such as Bathurst or Orange.
Sydney provides such a diverse market, with many differing buyer profiles, submarkets and constantly changing demographics. There are so many examples of changing trends in the property market that we have decided to focus on two main areas to bring this to light. We have headed south of the harbour to the Sutherland Shire for our first case study. It only feels right that we give the north side of the harbour the right of reply, so it is off to the Northern Beaches or the insular peninsula as those who live outside it like to call it!
The Sutherland Shire is located approximately 20 kilometres south of Sydney CBD and covers a large area from Waterfall, Menai and Sylvania to Cronulla and Kurnell, and includes approximately 218,000 residents (2016 census). Most residential construction throughout the Shire took place from circa 1950s onwards and included traditional three and four-bedroom fibrous cement and brick veneer dwellings on standard allotments of at least 500 to 600 square metres. These properties were the main style of construction throughout the Shire and were family homes. Higher density construction commenced around the 1960s and 1970s, mostly around Cronulla and along the train line.
The Shire has been transforming over the past decade or so as there has been changing demographics, ageing and increasing population, and particular areas becoming gentrified for various reasons.
This is particularly evident in the suburb of Caringbah which is generally divided into Caringbah South, Lilli Pilli and Dolans Bay on the southern side of the peninsular and the northern part of Caringbah which adjoins the suburb of Taren Point further north. This suburb once consisted of traditional style family homes on above-average sized allotments however due to the aforementioned reasons it now comprises varying examples of developments ranging from high-density developments along the transport corridors, medium-density townhouse style properties, duplexes and also seniors housing which are generally reserved for residents who are over 55 years of age.
307/316 Taren Point Road, Caringbah – Apartment
- Sold for $570,000 on 06 December 2019
- Includes one bedroom, one bathroom and a single car space.
607/22 Banksia Road, Caringbah – Apartment
- Sold for $1.18 million on 26 November 2019
- Includes three bedrooms, three bathrooms and a double car space.
- Split over two levels and benefits from city views.
2/9 Alice Street, Caringbah South – Townhouse
- Sold for $1.4 million on 09 September 2019
- Includes four bedrooms, three bathrooms and a triple car space
Development throughout Caringbah has been somewhat assisted by the above average land sizes that allow for duplex and townhouse style developments. Many of the baby boomers have sold their large, older properties to younger generations and young families which is also encouraging new non-residential development such as cafes, restaurants, hotels, pubs and the overall changing demographic of the area.
The current low interest rate environment and overall positive market sentiment is likely to fuel continued construction and renovation, particularly in the first half of 2020. The Beaches First Home Buyers and Investors: Dee Why has a high saturation of the young workforce (age 25 to 34) at 21.1 percent when benchmarked against the Northern Beaches LGA at 11.7 percent (abs.gov. au). The suburb has one of the lowest median unit values at $750,000 (RPData) which appeals to these entry level markets.
Family: Realestate.com.au recently reported that for the first time ever, more people from outside the Northern Beaches are searching for property than within. Avalon has become a big benefactor of the strong market conditions with more properties sold in 2019 than any other suburb on the beaches. We are seeing a huge influx of younger families migrating from the eastern suburbs and inner west which is really reshaping the suburb’s profile. It will be interesting to compare the 2021 census data against the 2016 data to quantify this demographic change.
Downsizers: The market is a combination of local empty nesters looking to remain in the area in addition to downsizers from the wider Sydney region looking for a sea-change. Strong saturation areas of individuals over 50 include Scotland Island and Church Point at 52.8 percent and Mona Vale at 43.1 percent in comparison to the Northern Beaches LGA at 35 percent (abs.gov.au). Over 55s developments perform strongly on the Northern Beaches with Terrey Hills seeing several over 55s developments such as Akuna performing well. For more localised options, ground floor apartments outperform their counterparts. 2/10 Lagoon Street, Narrabeen had a price guide of $900,000 to $950,000 and subsequently sold for $1.23 million on 11 February 2020. It is ideally situated in the heart of Narrabeen, providing a single level floorplan, courtyard and two secured car spaces, ticking all the boxes for a downsizer.
There is still a gap in the market for single person accommodation. Developers have made several applications for boarding house style accommodation in Manly, Beacon Hill, Allambie Heights and Frenchs Forest. Several have been rejected by Council due to local concerns of congestion and over-crowding, however, after an on-going legal battle, one has recently been approved through the Land and Environment Court, which will likely set precedence for future submissions.
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