National Overview. NSW/ACT Property Report July 2014

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1 NSW/ACT Property Report

2 National Overview Upgraders seize opportunities The past 12 months have provided an abundance of opportunities for upgraders to climb the property ladder. Interest rates are at record lows, rising values have boosted home equity, and many Australians are trading up to larger homes or more desirable locations, or are achieving lifestyle aspirations such as moving to acreages or beachside locations. This quarter, Herron Todd White valuers around the nation identified those areas where upgraders are buying, and which locations can give buyers the best of both worlds decent capital growth and a quality lifestyle. PROXIMITY TO SCHOOLS AND FACILITIES IS A KEY DRIVER For many upgraders, the decision to move is based on meeting the needs of a growing family, and consequently, family-friendly suburbs have been the key beneficiaries of upgrader activity. Despite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks... In Brisbane upgraders are attracted to middle-ring suburbs like Grange, Newmarket, Ashgrove, Coorparoo and Camp Hill located 5-10 kilometres from the CBD. Here, family homes start in price at around $600,000. In Sydney, the Hills District offers ideal family living with quality homes and plentiful local facilities and as a bonus, capital growth is virtually assured with the construction of the Norwest rail line, due for completion in The same preference for family living is driving upgrader activity in Darwin. Notably, the northern suburbs of Nightcliff, Rapid Creek and Jingili offer larger homes on generous blocks with the extra appeal of quality local schools. In Tasmania, upgraders are heading to areas where character homes are available. Many of Hobart s inner suburbs such as Sandy Bay and Battery Point have benefited from this trend. 2

3 A CHANCE TO GET MORE BANG FOR THE UPGRADE BUCK Despite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks, and this is allowing upgraders to enjoy more bang for their buck. On Queensland s Gold Coast, for example, beachfront homes in Mermaid Beach are priced around $3 million a far cry from the price tags of up to $12 million seen in In Perth, the riverside suburb of Victoria Park is becoming a sought-after address among upgraders. Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth. INNER-CITY LIVING HOLDS APPEAL Reflecting the trend towards near-city living, inner-city suburbs are also attracting upgrader interest. In Melbourne, Fitzroy North offers a thriving cafe and restaurant scene, and as demand surges in neighbouring suburbs, capital growth in Fitzroy North is expected to be healthy over the long term. In Adelaide, Bowden is undergoing significant urban renewal and the gentrification of surrounding suburbs should also underpin growth in this area. With so many opportunities available to achieve your personal property goals, I invite would-be ugraders to take a look through our state-by-state reports to discover the suburbs of choice for other upgraders, plus a guide for what you can expect to pay for your next home. Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth. Brendon Hulcombe CEO - HERRON TODD WHITE 3

4 New South Wales Sydney metropolitan THE HILLS HOLD APPEAL The Hills District continues to be a popular area for upgraders, with notably sought-after suburbs including Kellyville, Castle Hill, West Pennant Hills and Bella Vista. The Hills area benefits from access to the M2 motorway, and the Norwest rail line is due for completion in There is also an abundance of local schools, shopping facilities and access to local employment opportunities, including Norwest Business Park. Strong capital growth is anticipated for the Hills area as the region s suburbs are close to being fully developed with only limited infill subdivisions now remaining, thereby capping supply. Castle Hill remains particularly popular among upgraders, recording the third-highest sales volume in Sydney over the previous 12 months. Units in Castle Hill range from $550,000 to $650,000, though a record sale of $1.1 million was achieved in Nearby Kellyville has few units; however, supply will be increased through several large-scale developments proposed for the rail-link corridor, with asking prices starting at $550,000. The average house price in Castle Hill is around $880,270, while the price rises to $1.8 million for prestige homes. Kellyville s average house price is $778,548, and prestige houses are priced from $1.2 million. In Bella Vista prestige houses are priced at over $2 million. NORTH SHORE AND EASTERN SUBURBS The established locations of Turramurra, Pymble and Lindfield on Sydney s North Shore are popular with expatriates and overseas buyers. While these suburbs are strong performers in any market, selling periods tend to become extended during periods of market uncertainty. Apartments are priced from around $800,000, with houses ranging from about $1.5 million to $2.5 million at the prestige end. In the east, Point Piper and Darling Point remain popular among wellheeled upgraders, and prices range from $1 million for apartments through to $8 million for prestige homes. 4

5 Regional NSW THE HUNTER Suburbs such as Adamstown and New Lambton are considered prime candidates for upgraders. Both locations offer proximity to Westfield Kotara, the Calvary Mater Hospital and John Hunter Hospital. Two-bedroom townhouses in these locations are priced between $300,000 and $500,000 depending on aspect and possible views. Houses are available from around $400,000 to $700,000, while prestige homes closer to the beach in suburbs like Merewether can achieve prices of $3.55 million. Capital growth in Newcastle has been significant over the past months, though this is likely to stabilise following subdued wages growth. ILLAWARRA The most desirable areas sought after by upgraders tend to lie in the northern suburbs of Woonona, Thirroul, Bulli and Austinmer. These are generally older established suburbs with proximity to public transport, the Wollongong and Sydney CBDs, local beaches and the University of Wollongong. Strong capital growth of up to 15% has been evident over the past 12 months, and prices range from around $380,000 for older 2-bedroom townhouses through to $2 million for prestige waterfront homes. Capital growth in Newcastle has been significant over the past months, though this is likely to stabilise following subdued wages growth. SOUTHERN HIGHLANDS Upgraders continue to seek out homes in Bowral and Mittagong, where homes on large lots are priced from $600,000 to $1,500,000 and prestige homes can command $4 million. The local market has experienced minimal capital growth over the past decade and price gains in the order of 5% annually are anticipated over the next few years. CENTRAL COAST Desirable areas for upgraders include the beachside suburbs of Terrigal, Avoca Beach, Wamberal, Copacabana, Blue Bay, Toowoon Bay, The Entrance and Norah Head. These locations provide lifestyle living and while some segments of the market have suffered, value overall has remained static. We are seeing prices at a low of $800,000, though $1.2 million to $1.4 million is the most popular price point among upgraders. FAR NORTH COAST Within the Far North Coast localities of Lismore City, Casino and Kyogle, upgraders are favouring established, modern homes comprising 4 bedrooms. These are generally priced from around $550,000 to $800,000, and improving market conditions within Ballina and Lennox Head over the past 9 months have reduced the level of available stock. In Coffs Harbour, upgraders are looking to the new estates such as The Lakes at North Boambee Valley, where prices start at $475,000. 5

6 WAGGA WAGGA The Wagga suburb of Tatton is appealing to upgraders owing to its larger lot sizes and well-planned developments. House prices start at $400,000, with prestige homes priced from $800,000-plus. TAMWORTH North and East Tamworth are popular among upgraders, with North Tamworth in particular benefiting from proximity to shops, schools, a TAFE college and a new hospital. East Tamworth has notched up sales as high as $1.35 million over the past year and large federation homes continue to attract buyer interest. Apartments in both locations are priced from as little as $150,000, with 3-bedroom and 4-bedroom houses priced from $200,000 to $350,000. ALBURY Central Albury is the city s most desirable location for upgraders, featuring period homes that offer the potential to add value through renovations. Prices range from $300,000 for units through to $700,000-plus for houses. Capital growth in the order of 10-30% is possible over the next 10 years. ACT Upgraders in the ACT tend to seek out more central locations around the inner north like Ainslie, Campbell, Reid and O Connor; or Griffith, Narrabundah, Red Hill and Deakin in the inner south. Woden and Weston Creek are also affordable suburbs. Central Albury is the city s most desirable location for upgraders, featuring period homes that offer the potential to add value through renovations. The main attractions of these areas are larger land sizes; access to parks, schools and shops; and proximity to employment hubs as well as the Canberra CBD. Two-bedroom townhouses are priced from about $550,000, with 3-bedroom and 4-bedroom homes available from $600,000 to $1.2 million. Prestige properties can command prices of $3 million-plus. 6

7 Local expertise. National strength. Trusted solutions. Herron Todd White is Australia s leading property valuatiuon and advisory group. For more than 45 years, we ve given our customers peace of mind and the confidence to make good-decisions for their vital property investments. Whether you are buying or selling, expert independent advice is the smartest property investment you can make. Liability limited by a scheme approved under Professional Standards Legislation. The scheme does not apply within Tasmania. Telephone admin@htw.com.au htw.com.au