Alexandria House Prices Lift 1,200% Over Three Decades

December 9th, 2022 - by Brad Gillespie

Sydney house prices have grown exponentially over the past three decades, going from $188,050 to $1,036,727 - a rise of 550%.

But Alexandria house prices have outperformed even this impressive figure - and by some margin too.

Since 1993, Alexandria’s median house value has gone from $157,000 to $1,850,000 - a rise of almost 1,200%, or more than double the city-wide average.

So why has Alexandria been one of Sydney’s - and Australia’s - best-performing suburbs over the past 30 years?

Alexandria 30 years ago

I probably don’t have to tell you that Sydney’s Inner City and Inner West looked very different three decades ago than they do today.

Going back into the twentieth century, Alexandria was once Sydney’s most important industrial area, often dubbed ‘the Birmingham of Australia’. This period of its history was still very much alive in the 1990s, when Alexandria was more associated with factories and manufacturing than residential living.

While there was quality housing stock - especially in areas such as the Golden Triangle - there was simply a lot less of it than today, with most developments being constructed in the years between then and now. There were also far fewer amenities - with no supermarkets, fewer public transport options (although Redfern and Erskineville stations were always nearby) and far fewer eating and drinking or nightlife options.

The trend towards inner city living

Of course, since then, virtually everything has changed about our area. That’s partly because there are a lot more people living here. Living in the inner city became fashionable, as people often began prizing walkability and convenience more than they once did.

Between 2006 and 2016 alone, Sydney’s inner-city population grew 33%, and many of these new residents were young, with most newcomers aged between 25 and 34.

Next door to Alexandria, Green Square station was built, and the area around it developed. We started to see new developments spring up. The cafes, restaurants and bars followed. Suddenly, this once-industrial suburb became a very desirable place to live.

As that happened, property prices naturally rose more quickly than many other parts of the city.

Up and coming suburbs grew fastest

Another trend worth noting is that, over the past 30 years, it’s lifestyle suburbs where house prices have often been growing fastest.

When Aussie home loans released a list of all the suburbs where house prices grew most between 1993 and 2018, vibrant inner city and inner west suburbs Alexandria and Lewisham made the list. But so too did beachside Sydney suburbs such as Clovelly, Bronte, Freshwater and Manly, as well as newer housing areas that have been developed in the intervening decades including Bella Vista in Sydney’s North West and Currans Hill.

The one thing that all had in common was that they weren’t established “blue chip” suburbs in 1993, with many either working class neighbourhoods or even undeveloped areas.

Scarcity value

Another factor I believe has helped house prices rise so quickly in our area is the scarcity of them compared with apartments. Census data from 2021 shows almost two-thirds of Alexandria locals (65%) live in apartments, compared with 29% in semis or terraces and less than 5% in freestanding homes. As recently as 2001, only 37% lived in apartments compared with 55% in semis or terraces and 5.8% in separate homes.

When people want to move up the property ladder, it often means trading in an apartment for a house - and many people would like to do this in the same area they already live in. When few properties of this kind are available, it puts upwards pressure on prices.

The reality is that most houses in Alexandria are bought by people who already live in apartments in the area. The more apartments there are, the more people there are also wanting to move up. This creates more competition and prices start to rise.

So don’t believe people who try to tell you that building apartments reduce the value of existing homes. Often, the opposite is true

Growing wealth, declining interest rates

The final thing worth noting about Alexandria is that it is a lot more affluent than it was 30 years ago. According to the 2021 census, the median weekly household income for the suburb was $2,654. In 2006, the first year household income was recorded in detail, Alexandria’s median household income was $1,690 - a 45% increase.

But interestingly, despite rising wages and rising house prices, people were actually spending comparatively less on their mortgages in 2021.

In 2006, when the official cash rate was 6.25%, the median monthly mortgage repayment was $2,167 a month, or 29.6% of the median household income. By 2021, when interest rates were 0.1%, the median monthly mortgage repayment was $2,751, or 23.9% of the median household income.

So growing wealth and cheaper finance have also played their part in Alexndria’s strong property price growth.

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