How Much Is An Extra Bedroom Worth In Sydney’s Inner West?

February 23rd, 2024 - by Brad Gillespie

Most people will tell you that an extra bedroom makes a property more valuable.

But exactly how much more is one extra sleeping space worth?

We look at and behind the data to examine how much an extra bedroom is really worth in Sydney’s inner city and inner west.

What the raw data says

If you look just at the number and nothing else, you’ll see a reasonably neat progression in the median price every time an extra bedroom gets added. So, as the table below illustrates, three-bedroom houses tend to sell more than two-bedroom houses, and two-bedroom apartments tend to sell for more than one-bedroom apartments. There are, obviously, exceptions to this rule.

Houses

Suburb Two bedrooms Three bedrooms Four bedrooms Gap two-to-three bedrooms Gap three-to-four bedrooms
Erskineville $1,500,000 $1,953,000 - $453,000 -
Alexandria $1,797,500 $2,150,000 $2,350,000 $352,500 $200,000
Newtown $1,525,000 $1,885,000 $2,450,000 $360,000 $565,000
Marrickville $1,654,000 $1,945,000 $2,400,000 $291,000 $455,000
Camperdown $1,559,500 $1,950,000 - $391,000 -
Rosebery - $1,935,000 $2,850,000 - $915,000
Mascot $1,472,500 $1,806,500 $2,020,000 $334,000 $213,500

Apartments

Suburb One-bedroom Two bedrooms Three bedrooms Gap one-to-two bedrooms Gap two-to-three bedrooms
Erskineville $752,500 $1,135,000 $1,657,875 $382,500 $522,875
Alexandria $675,000 $990,000 $1,690,000 $315,000 $700,000
Newtown $650,000 $1,055,000 - $405,000 -
Marrickville $635,000 $875,000 $1,260,000 $240,000 $385,000
Camperdown $740,000 $1,200,000 - $460,000 -
Rosebery $671,250 $905,000 $1,367,500 $233,750 $462,500
Mascot $689,000 $860,000 $1,155,000 $171,000 $295,000

Analysing the numbers

If taken on face value, these numbers show that the median cost of going from a two-to three-bedroom house can range from $291,000 in Marrickville to $453,000 in Erskineville.

Meanwhile, the cost of an extra bedroom when going from a three-to-four-bedroom house can range from $200,000 in Alexandria to an eye-watering $900,000 in Rosebery.

Interestingly, however, the most expensive suburb for an extra bedroom in a house is also the cheapest for an extra bedroom in apartments, with the cost of stepping between a one- and two-bedroom apartment in Rosebery just $233,750.

At the other end of the apartment spectrum, going from a two- to three-bedroom apartment in Alexandria costs as much as $700,000.

Extra bedrooms usually means extra space

But, again, there’s even a bit more to it than that. After all, moving up in bedroom size usually also means moving up in living area space. It can also mean extra parking spaces, extra bathrooms, a larger footprint or land size, more kitchen area and generally more capacity to house more people. So people aren’t just paying for an extra bedroom.

Generally speaking, having more bedrooms opens up the market to a wider range of buyers, including families and couples who want to be able to work comfortably from home.

Different suburbs, different stock

Another factor worth considering is that not all suburbs have the same housing stock, and this, too, can have a bearing on the market. For instance, in Alexandria, just 4.7% of dwellings are separate houses, while 65.2% are apartments (the remaining 29% are townhouses, terraces and semi-detached). In Marrickville, on the other hand, 32% are separate houses, 47.2% are flats or apartments, and 18.5% are townhouses, terraces or semi-detached.

This, too, can have a bearing on the price of an extra bedroom.

It means, for instance, when someone buys a four-bedroom house in Marrickville, there’s a strong chance they’ll be purchasing a free-standing home on a reasonably sized block (at least for our part of the world).

That said, in suburbs where there are very few properties of a certain type - like houses in Alexandria - scarcity value can also push prices higher.

Two property trends having an impact on extra bedroom

Over the past few years, we’ve noticed a few trends also influencing the value of an extra bedroom in our area.

First is a growing desire for space, especially for a home office. Second is the increased importance of downsizers in our local area, many of whom want an extra bedroom, especially if it provides space for work/hobbies or even for the children and grandchildren to stay.

Third, we’re seeing more buyers interested in apartment living for life - many of whom will pay a premium for three (or more) bedrooms so they can comfortably accommodate the whole family.

And, finally, we’re seeing a lot more premium buyers in our area - especially those interested in penthouses and sub-penthouses.

This has led to exceptional demand for three-bedroom apartments - and as the figures illustrate, the value of a third bedroom (or the gap between two-and-three bedroom apartments) is often much higher than the value of a second bedroom (or the gap between one- and two-bedroom apartments).

This is especially true in areas with a comparatively high number of premium developments, such as Alexandria and Erksineville.

In short…

While there's little doubt an extra bedroom usually comes at a cost, exactly what that cost is varies significantly depending on property type, location and other factors.

That means no one can definitively say exactly what value a bedroom will add. Instead, the key is if that extra bedroom attracts more buyers.

That’s because, ultimately, any property is worth what someone will pay for it.

Want more?

Contact our team today to find out more about how we can help you buy and sell in Sydney’s inner city and inner west.