Why An Inner City Home Is An Investment For The Long Term

August 31st, 2018 - by Brad Gillespie

Homeowners in Sydney’s inner city have seen amazing growth in the value of their properties.

Yet after the headlines about last year’s dip, you’d be forgiven for wondering if it’s worth buying into the market.

Corelogic figures show Sydney house prices overall falling 7% year on year to July 2018. And in Alexandria, the first four months of 2018 saw median house prices fall 6-7%, even as the price for units climbed back by nearly 2%.But are these figures really a sign of a softening market, or do longer-term data tell a different story? In fact, has the recent cooling off opened up a rare opportunity for would-be homeowners to enter one of the city’s most competitive property markets?

Here are some facts we think you should know about inner city price trends over the years, rather than months:

The 5-year view

According to Corelogic, in Alexandria the median sale price of a house grew steadily year by year from just $950K in January 2014, to over $1.7m in June 2017. The much-hyped dip only brought it to $1.6m in April 2018, a number still well above the 2014 value — only now, a more affordable one.

In neighbouring Erskineville, between April 2014 and April 2018, the median sale price for a house rose from $987K to $1.36m.

The 10-year view

From June 2009 to April 2018, according to both realestate.com.au and Corelogic, the median price of a house in Alexandria more than doubled, from $780K to $1.6m. Almost as dramatic, the median price of a unit went from just above $410K to $855K.

Likewise, in Erskineville, over the same period, the median price for a house grew from $628K to $1.36m. The median price of a unit went from $490K to $855K.

There are good reasons why the inner city boasts a strong platform for growth:

The population is coming…

The area attracts young professionals, who often look to stay and raise a family. According to Corelogic, households in Alexandria and Erskineville are mostly professional, younger working couples who’ve flocked in from all areas of Sydney, looking for space, city living perks and value for money. It’s clear why nearly a third of Erskineville’s residents have moved in from the exclusive eastern suburbs.

…and so is the infrastructure

Inner city suburbs like Erskineville and Alexandria boast:

• Quick commutes to work — and for young families, a short distance to Sydney’s top public and private primary and high schools, including selective schools.

• Access to outdoor recreation (parks cover a good 14% of Alexandria).

• Reasonable value for such close proximity to the city. Alexandria in particular, with its 1-bedroom units starting at $550K and 3-bedroom terraces around $1.4-1.8m, offers unique, much-desired, inner city lifestyle appeal.

• Thriving cultural hubs and social destinations, from top cafes (such as the award-winning Grounds of Alexandria) to restaurants, music and comedy venues such as the Enmore Theatre.

• Incoming WestConnex and Green Square developments, which will ease congestion and bring new work and play opportunities to residents.

Your choice should depend on your goal

The inner city offers plenty to consider for buyers who are looking ahead, even for 1-3 years.

Our own experience selling real estate in the inner city has given us an oversight of the highs and lows of the market over almost 2 decades.

So if you’ve been thinking about making the move and would like to know more about where to start, don’t hesitate to contact me today.