Good News On Unit Prices

November 29th, 2019 - by Brad Gillespie

After the recent downturn in property prices across Sydney and other parts of the country, some good news is starting to emerge again, particularly for inner-city unit prices.

In promising news for property owners and investors, unit prices across Sydney have bucked the nationwide downward trend by increasing 2.6% in the past three months, according to data from Domain Group.

Sydney’s median unit price is now $694,840, which is a positive sign that we may be seeing the first green shoots of a broader property market recovery. At the least, this tells us that the inner city property market has been resilient during the downturn.

According to the Domain House Price Report for the September quarter, gains in unit prices have been recorded across Sydney in the northern beaches, lower north shore, inner west, city and east, south-west and upper north shore.

What’s driving the recovery?

The effect of increased supply putting downward pressure on unit prices may have peaked. Building approvals are down 50 percent in Sydney from their recent high. This is due in large part to weaker demand and funding challenges for developers, as well as the wake of scandals such as the Opal and Mascot Towers and concerns about combustible cladding. The upshot is that Sydney is likely to once again shift to a cycle of undersupply within the next two years, particularly as the city’s population continues to grow.

An environment of lower interest rates and improved sentiment amongst property investors following the results of the federal election are also boosting prices in Sydney and Melbourne.

As our latest Inner City Property Market Update notes, we’re actually seeing one of the fastest property market recoveries ever. Sydney’s Inner City and Inner West has fared especially well, with units seeing 3.3% quarter-on-quarter growth so that the median price is now $762,000. Suburbs that have enjoyed growth currently include Newtown – up 0.80% with a median unit price of $660,000 – and Erskineville, which is up 1.90% with a median unit price of $851,500.

The future looks bright

Other factors contributing to price growth and growing investor confidence in the inner-city include a number of infrastructure projects, such as the new Central to Eveleigh precinct, and changes to laws that look set to rejuvenate nightlife in the inner city. Areas such as Alexandria and Redfern are also becoming increasingly popular with downsizers seeking a low maintenance urban lifestyle, leading to greater demand in these neighbourhoods. First home buyers are also coming out again.

Together, these factors mean that Sydney’s inner-city units present excellent prospects for strong long-term capital gains. If you’re looking to get started as a property investor, you could do far worse than to investigate these suburbs on the rise. You may be surprised at what you can buy for under 800K in Sydney’s inner city.

For sale

With new stock on the market, we have a number of inner-city units that would make fantastic homes or property investments.

676/83 Dalmeny Avenue, Rosebery
This one-bedroom, one bath with parking inner-city pad is on the market with a price range of $565,000-615,000.

M207/68 McEvoy St, Alexandria
This 2 bedroom, 2 bathroom apartment with parking has a coveted Northerly aspect and an auction price guide of $775,000.

Recently Sold

43/95 Euston Rd Alexandria
A 1 bedroom loft style apartment with parking just listed for sale at $675,000, which sold for $682,500.

18/55 Ralph Street Alexandria
A stylish inner-city one-bedroom pad, walking distance from Green Square Station. It sold for $685,000.

13/1 Shirley Street, Alexandria
1 bedroom, 1 bath with parking, sold for $600,000

B309/222 Botany Road, Alexandria
1 bedroom, 1 bath, sold for $565,000

Looking to buy or sell property in Sydney’s inner-city?

Get in touch with me today to find a property to suit your needs.