property guide 2009 - Domain.com.au

YOUR
NEW-LOOK
PROPERTY
GUIDE
Welcome to the 2009 Sun-Herald
Domain Property Guide, which
offers an insight into what your
suburb is worth, along with
projections for the year ahead.
New editorial features include a
houses and apartments overview
on the opening pages.
More than 600 Sydney suburbs
are grouped into nine regions —
Lower North Shore, Upper North
Shore, Northern Beaches, City and
East, South, West, Inner West,
South West and Canterbury
Bankstown.
Compared with the previous
year, overall, Sydney median prices
for both houses and apartments
dropped 3 per cent in 2008. A
median (see page 12 for definition)
is based on a minimum of 10 sales
records. Where there are less than
10 sales, it will be denoted as ‘‘n/a’’
(statistically reliable information
not available). For example, the
2007 median for Point Piper
houses was $6 million. However,
because of the decline in sales
activities in 2008, less than 10
house sales were recorded,
resulting in ‘‘n/a’’ for the 2008
house median.
Projections of house and unit
prices are based on internal
Australian Property Monitors data
and external data, including shortterm
interest rates, NSW income
per capita, building approvals and
unemployment rates over the
past 20 years.
In arriving at a projection, APM
considers forward estimates of
these variables. Projections
should be used as a guide only.
Projections are not available for
suburbs where there is insufficient
median price data.
Most suburbs received a ranking
for the combined value of house and
unit sales, from one (highest) to
537. Suburbs which did not record
adequate turnover for a median
value in 2008 are not ranked.
INSIDE
HOUSES 8-9
APARTMENTS 10-11
HOW TO READ TABLES 12
LOWER NORTH SHORE 13
UPPER NORTH SHORE 17
NORTHERN BEACHES 24
EAST & INNER CITY 27
INNER WEST 33
WEST 38
SOUTH-WEST 50
SOUTH 56
CANTERBURY-
BANKSTOWN 61
Domain editor Stephen Nicholls
snicholls@fairfaxmedia.com.au
9282 3273
Writers Susan Wellings, Alex Brooks
Production Matthew Odlum, Peter Jones
Design Ann Loveday
Advertising Linda Chan 9282 3506
Cover Rebecca and Andrew Broughton
with daughter Taylor in Surry Hills.
Photo: Janie Barrett
A YEAR OF OPPORTUNITY
AN INTERESTING TIME
Liam O’Hara
Uncertainty, trepidation and opportunity are
key words in 2009. Property prices have fallen
and will continue to fall modestly in some
areas of Sydney because national income (or
GDP) is substantially weakening,
unemployment is expected to jump and
everyone seems to be borrowing less while
many are
deleveraging by
selling assets.
During the past
eight to 10 years,
many areas have
risen by up to
150 per cent.
Clearly, these price
increases are
unsustainable.
As incomes fall
and borrowing
winds back, it is expected that prices will fall
dramatically in those areas where prices have
risen the most. Opportunities will occur.
Areas of Sydney that are cheaper become
more so in a downturn. This is where the
deep cuts to interest rates and the first home
buyer grant will likely have their biggest
effects in 2009.
Whatever way you look at it, especially if
you’re cashed up, 2009 represents an
interesting time.
Liam O’Hara is a senior economist with
Fairfax-owned Australian Property Monitors.
JOBS THE KEY
Louis Christopher
The first home buyer grant, the housing price
falls we have already had and the significant
cuts in interest
rates have made
Sydney housing far
more affordable
than 12 months
ago. However the
threat of higher
unemployment
will make most
investors and
home buyers
cautious.
It is very clear
that the Reserve Bank and the Rudd
Government do not want a housing price
crash. And, for better or worse, these two
entities have the means to stop one.
And so, while I will be closely watching the
usual reliable housing indicators such as
housing finance approvals and auction
clearance rates, I will also be paying special
attention to unemployment, Australia’s
trading activity and most of all, the speed
at which the Reserve Bank of Australia
prints money. These indicators suggest the
Sydney housing market will continue to be
weak for at least the first quarter.
We should see a seasonal rise in auction
clearance rates starting in March, however
this should not be mistaken for a recovery.
For a recovery to occur, history has
indicated that clearance rates need to be
consistently recording 60 per cent or more.
Louis Christopher is managing director of
SQM Research and head of property with
Adviser Edge.
INVESTORSTORETURN
Mark Armstrong
The Sydney property market has been the
country’s worst performer in the past five
years but 2009 will be the year the sleeping
giant begins to stir.
Not all markets will grow, however. The
first home buyer market will suffer from
rising
unemployment
and the top end
will continue to
be affected by low
business
confidence.
Property
investment
strongholds in
the inner city will
be the exception.
Investors who
have been spooked by last year’s
sharemarket crash will begin to search for
the next emerging market. They will
discover a property market that has grown
by less than 1 per cent each year since 2003,
rental vacancy rates of about 1 per cent and
interest rates falling to record lows. It does
not get much better for property investors.
2008 will be remembered as the year
property once again became a viable
investment. 2009 will see the penny drop.
Mark Armstrong is a director of Property
Planning Australia,
www.propertyplanning.com.au, and The
Property School, thepropertyschool.com.au.
PRICES FALL AT UPPER END
Rod Cornish
The domestic economy will be an overriding
influence on Sydney’s housing
market at a time when other cyclical drivers,
including affordability, become more
positive. Trends for detached houses and
apartments will be quite similar with some
further falls likely in Sydney’s overall median
price in the first half of the year as the
economy and employment weaken.
The middle and outer-ring areas of Sydney
have been in a downturn for almost five
years. Price falls in
2009 will be more
pronounced at the
upper end, with
some recent
evidence of more
first home buyer
activity. We really
need to see the
domestic economy
stabilise before
investors return.
Following nearterm
weakness, we believe Sydney will be the
first Australian housing market to recover,
with affordability improving to 1998 levels
later this year, new supply at 30-year lows
and the strongest uplift in inward migration
in seven years. But that will be a story for
2010-plus.
Rod Cornish is the division director of
Macquarie Capital Advisers.
A MUCH-NEEDED STIMULUS
Cameron Kusher
The Federal Government’s stimulus package
for first home buyers has sparked interest in
this market. By limiting the availability of the
grants until the end of the financial year, the
Government has created a sense of urgency
and much-needed stimulus.
This means 2009 is likely to be the year of
the first and second-home buyer and the
market for more affordable properties (those
priced at less than $500,000 to $600,000) will
see the greatest activity.
When looking to
purchase in this
market, buyers
must have a clear
strategy. In order
to achieve the best
future capital
growth outcomes,
they need to target
strategically
located properties.
The year may
also see the return
of investors, finally. A number of areas are
showing positive cash flow. Inner city units
and outer, more affordable, houses in
particular are showing some of the best
average gross rental yields and these are
likely to improve further.
Cameron Kusher is a senior analyst with
RP Data.
6 THE SUN-HERALD PROPERTY GUIDE 2009 DOMAIN.COM.AU