With Sydney growth in the double digits for the last few years, it’s easy to think that property prices have certainly had their day in the sun and now it’s time to look elsewhere.
Unfortunately the market has other ideas and we’ve continued to see prices climb, albeit at a slower pace, coming into Spring and now respected research houses are posing a solid argument for prices continuing into 2017.
SQM Research’s Louis Christopher recently published his Housing Boom and Bust Report and has projected Sydney growth targets for the coming year to be between 11% and 16% depending on how interest rates pan out. For some great market analysis I recommend getting hold of a copy of the report as there are some great insights.
For those of you who are considering Sydney as a place to buy, the fact that the market has had a strong run up until now makes it all the more important to look at growth drivers for the future as some areas may well be exhausted for the coming years.
Apart from strong net migration and an undersupply of housing, one of the main drivers that Sydney has had going for it has been the creation of jobs, particularly through infrastructure spending via the State government. Follow the money and you can be sure property prices will be surging forward.
Here are 5 suburbs where we see potential coming into 2017 as infrastructure projects develop and attract workers and wages.
1. Pendle Hill – just to the west of Parramatta and serviced by it’s own train line, this is a suburb where you can still buy a well presented 2-bedroom apartment for under $500,000. Long term growth in this suburb is 6.6%, meaning that if you had bought here 10 years ago your investment would have effectively doubled in value. All this and a rental vacancy rate as low as 1.6% – it’s hard to beat. With close proximity to Parramatta City, it is set to benefit from the enormous amount of infrastructure that this council is undertaking – 33 retail, commercial and residential projects in the city alone as well as a $1.6bn upgrade of the city centre and a proposed light rail line to Rhodes. Of course, the construction of the West Connex will bring this whole area closer to Sydney city and drive employment prospects forward.
2. Ashcroft – while most would avoid such an area due to the undesirable portions of public housing, if you’ve been watching the governments approach to this you’ll realise that these ghetto-like neighbourhoods are slowly being disbanded and young families are buying in at affordable entry points, renovating and slowly changing the nature of the suburb. Only 3kms to the west of Liverpool city, you can purchase a decent house in this area between $550K and $650K and with a vacancy rate of 1.2%, you’re almost sure to rent it out straight away. The Liverpool area is the epicentre of some of the largest infrastructure undertakings in Sydney – road upgrades from Bankstown and out to Camden as well as the Badgery’s Creek Project, hospital upgrade and the establishment of the new Moorebank terminal for freight delivery. Ashcroft is the ugly duckling that will one day be revered for its family focus and proximity to the amenities of Liverpool City.
3. Redfern – while this area is running hot at the moment and is by no means cheap, 2017 will continue to see this area boom with its hipster-style gentrification from what was once a public housing ghetto. With one of the strongest long-term growth rates in Sydney at 9% and a rental vacancy rate near 1%, there is so much to love about this area. The proximity of the light rail running through Surry Hills and down through the Randwick area is sure to draw more people here as the lightrail reaches completion in the coming year and the conversion of the Australian Technology Park by CBA and Mirvac to house just over 9,000 CBA employees in the coming years will result in massive growth for this suburb and the surrounds.
4. Marrickville – this suburb has been a long-time favourite for those living in the inner west and the suburb is large enough that it still provides opportunities for growth in the coming year. With excellent fundamentals of 8.9% long term growth and a vacancy rate of 1.2%, this is a suburb where you can still buy a 2-bedroom apartment with parking for under $700,000. Marrickville is set to benefit from the development of the West Connex stages and the connections to the city that the project will provide. The future is strong for this area as the Sydney Metro City and South West rail link is extended through from Chatswood, under the harbour and out via Marrickville toward Bankstown with its own high-speed metro line.
5. Kensington – This small boutique suburb tucked in next to the bustling Randwick centre has long been a secret of the eastern suburbs, but with the light rail link looking to service this area in the coming year this suburb has yet to see its full potential. There’s no denying demand here as always been strong, with long term growth over 7% and the real benefits of the city to suburb light rail link yet to be fully realised, investment in this blue-chip area will reap rewards for years to come.