The 2010 Sydney residential property market – it’s off and racing

If one likens Sydney’s 2010 residential property market to the 2010 Winter Olympic Games, then the accompanying image best illustrates what has been happening in many brackets since the last edition of CurtiseCall on 21 December 2009.

Buoyed by the Reserve Bank of Australia’s surprise decision on 2 February 2010 not to increase the official cash rate, bobsleigh teams of investors, self managed superannuation funds and resilient first home buyers are driving up prices in the sub $1 million bracket of the Sydney property market. There seems little doubt that this is generally occurring at a rate consistent with the 4.63% rise in established house prices recorded by the Australian Bureau of Statistics (ABS) in the December 2009 quarter.

The trend in this bracket is particularly clear throughout suburbs within five kilometres of Sydney’s CBD. Take for example, the sale at auction of a derelict two bedroom semi detached house at 26 Wilford Street, Newtown. Facing a graffiti art wall and overlooked to the rear by new apartments with next to no chance of gaining off street parking, the $602,000 winning bid was $122,000 or 26% above the vendor’s reserve.

This trend is not confined to the inner city and has spread to middle ring suburbs such as Bexley and Arncliffe. An example was the sale on 13 February 2010 of 4 Percival Street, Carlton for $581,000 which far exceeded the price suggested by the comparable sales evidence.

In the eastern suburbs, a dark one bedroom apartment up four flights of stairs and accessed via undercover garages at 98 / 127 – 147 Cook Road, Centennial Park sold on 5 February 2010 for $516,000 which was about 15% higher than the selling agents price guide. That result pales when compared to the $805,000 paid for a one bedroom, 77m2 unit at 2 / 1 Eastbourne Avenue, Clovelly on 13 February 2010. At a rate of $10,455 per square metre for an unrenovated property with no parking, this sale illustrates the premium Sydney property buyers place on water views and direct beach access.

On the upper north shore, a cheeky pre auction offer of $1.03 million thwarted a herd of parties trying to buy a dilapidated two bedroom cottage without parking at 5 Nithdale Street, Pymble. Not so long ago, that property would have been lucky to fetch $850,000.

In the southern suburbs of Sydney, especially around Cronulla, modest two bedroom units have sold within days of being listed and for inflated prices. In these and other suburbs in Sydney’s property market, as predicted in the December 2009 CurtiseCall, there have been more buying opportunities so far in 2010 as sellers trade up and move closer to the city. However, the increase in supply is more than matched by the insatiable demand.

The upward pressure on prices in the sub $1 million segment will continue as a result of the NSW State Government’s announcement last week that work will start immediately on a 5.6 kilometre extension of the light rail network from Lilyfield to Dulwich Hill. Although sensible, this project will nevertheless increase housing demand and therefore, prices along that line.

At the prestige end of Sydney’s property market where Curtis Associates specialises, despite the traditional four week Christmas shut down, there were signs of increasing turnover with around 160 sales over $2 million being reported since 21 December 2009.

The northern suburbs drove this trend and accounted for at least 80 of those sales which was more than double the number of sales recorded in this bracket over the same period in the eastern suburbs.

North shore and northern beaches sales of interest (for example, because of the views they command, some of the ‘confidential’ prices which have been achieved or the infrequency with which they trade), have included:

• 46 Milner Crescent, Wollstonecraft – $2.07 million
• 19 Nelson Street, Gordon – $2.167 million
• 50 Bower Street, Manly – price confidential
• 69 Ku-ring-gai Avenue, Turramurra – price confidential
• 160 Whale Beach Road, Whale Beach – price confidential
• 8 Baden Road, Neutral Bay – price confidential

In the eastern suburbs, notable property sales during this period have included:

• 349 Edgecliff Road, Edgecliff – $3.995 million
• 91 Queen Street, Woollahra – $3.75 million
• 48 Arcadia Street, Coogee – $4.8 million
• 130 Bellevue Road, Bellevue Hill – price confidential
• 24 Suffolk Street, Paddington – $2.025 million
• 25 Mackenzie Street, Bondi Junction – $3 million
• 35 Fairfax Road, Bellevue Hill – price confidential
• 39 Robertson Road, Centennial Park – price confidential

In the southern suburbs, there were 19 top end sales including some deep waterfrontages which represent better value for money than their counterparts in the north and east. Such sales have included:

• 26 Pleasant Way, Blakehurst – price confidential
• 63 Vista Street, Sans Souci – $4.518 million
• 109 Kangaroo Point Road, Kangaroo Point – $3.7 million
• 41 Townson Street, Blakehurst – $2.6 million
• 17 Boorroo Street, Kangaroo Point – $3.425 million
• 9 Llewellyn Street. Oatley – $1.97 million
• 20 Orana Crescent, Blakehurst – price confidential

In the trendy inner west, there were 15 such recorded sales including the following trophy homes:

• 41 Abbotsford Parade, Abbotsford – $4.025 million
• 37 Kingston Street, Haberfield – $2.16 million