Sydney's most expensive suburbs

Author: Susan Wellings
Date: July 18, 2007
Publication: Sydney Morning Herald

Median prices in Sydney's most-expensive suburbs have jumped in the past year.

Which are the most expensive suburbs in Sydney for buying apartments and how the hell do you get to live in them?

It's the $1 million question - or even $1.2 million or $1.35 million in one place - that's bedevilled those of us who'd love a taste of the best, for the price of the worst.

"Sydney's highest-priced unit suburbs are basically determined by the location, particularly on the water and the presence of new apartment complexes," says Mathew Tiller, NSW research analyst with PRDnationwide.

"The top ones are always those on the water, close to the harbour or within easy reach of the CBD, shops, transport and places of employment. By comparison, Sydney's lowest-priced suburbs for apartments are usually those not by the water and with nothing particularly special about them."

Tops is Darling Point, where the median is $1.35 million, up by 15.6 per cent from the year before when the March median was $1.16 million.

Next up is Dawes Point, home of the exclusive Walsh Bay development, on the harbour. There, the median price for an apartment in March this year was $1.22 million, up 19 per cent from the year before's median of $1.02 million.

Sydney's third place, according to PRDnationwide figures, is claimed by Point Piper, at $1.2 million, up 23.1 per cent on the previous year; fourth is Milsons Point at $1.04 million, up a staggering 54.1 per cent; then Cabarita, at $800,000, up 4.2 per cent; and Cremorne Point at $765,000, up 1.7 per cent.

Balmain East and Central Coast's Avoca Beach, which are also both in the top 15 highest-priced suburbs for apartments, are doing well too. The median price of units at Avoca Beach rose by an incredible 86 per cent over the past year to reach $720,000 and Balmain East increased by 39.7 per cent to settle at $700,000. "These large fluctuations in the medians are caused by the release of new premium product on the waterfront over a certain period, which raises the median, or by sales of some very good properties," says Tim Lawless, PRDnationwide's research director.

Those kind of prices are in stark contrast to Sydney's cheapest apartment suburbs, which all lie south-west of the city: Carramar (near Villawood) with its median price of $140,000, down 3.1 per cent on the year before; Warwick Farm at $160,000, down 11.1 per cent; Cabramatta at $170,000, down 8.1 per cent; Lakemba at $174,000, down 5.9 per cent; and then Ambarvale at $185,000 up 10.9 per cent.

FOR INVESTORS

If you want the lifestyle a fabulous apartment in a top suburb provides, it will always be a good buy. If, however, you're looking at capital growth or the rental yield from an investment property, your fortunes may be mixed.

Prices at the top end of the apartment market tend to be volatile, says investment researcher Louis Christopher of Adviser Edge. There aren't too many buyers around willing and able to part with such huge sums of money, so your resale value depends very much on whether there's enough interest in your apartment to keep the price steady - or drive it up. "Some people have done well; others have been extremely burnt," Christopher says. "It's important to do a thorough valuation on an apartment in an expensive area, looking at comparable sales and past values. The price can vary substantially depending on timing, where the market is at."

He says investors should also remember that land tax and transaction costs will be higher for expensive apartments, while the yield will probably be the same - about 3 per cent - as for units in cheaper places.

THE GROWTH IN DEMAND

The affordability crisis is making apartments more attractive to many people, but also empty-nesters are increasingly using the equity from large houses to move into units, and carbon-conscious buyers are trying apartments. All these factors are driving up apartment demand, and thus prices.

"As well, apartments tend to be better designed now and there's a lot more variety available," says architect Tim Greer of Tonkin Zulaikha Greer. "As Sydney continues to become more urbanised and local councils put more money into parks and gardens to improve amenities for apartment buildings, they'll also grow in popularity."

By 2030, planners expect about 45 per cent of Sydneysiders to be living in medium- to high-density housing. Changes in demographics will drive that, says Caroline Butler-Bowden, author of a book about apartment living, Homes In The Sky, and head curator of the Museum of Sydney.

"Empty-nesters are really gravitating towards apartment living, looking for lower maintenance and better security, as [are] business visitors here for short periods and the rising number of single people," she says. "So many of them are in the inner city or by the harbour where people want to live to be close to facilities."

HOW TO BUY IN CHEAPLY

If you're looking to buy in Darling Point and Point Piper, two of Sydney's richest top three suburbs, you might be in luck. In these areas, says Belle Property director Mark Murphy, it's still possible to buy a small unit in the $400,000s if you're prepared to forego views. "There are some cheaper apartments in some of the older, walk-up buildings," he says.

For Sydney's second-priciest suburb, Dawes Point, the news isn't so hopeful. If you don't have a lazy $1.2 million, you'd better work harder to earn more or keep buying lottery tickets, says local City Living agent Tasman Fallshaw.

"The bottom level at Walsh Bay is $1.2 million and on the pier you're looking at $1.35 million for a two-bedder," he says. On the north side, where apartments have been around for much longer, there are also bargains to be had around Milsons Point and Cremorne Point. There, look at the older, walk-up blocks. In Cremorne Point, for instance, Mike Gillan, managing director of Ray White, Neutral Bay, advises looking at older-style apartments along the northern end of Kareela Road, Cremorne Road or Milson Road.

"They aren't cheap by average Sydney standards but you can buy a two-bedroom unit there in the $400,000s," he says.

'A JOY TO LIVE IN A PLACE LIKE THIS'

Gazing at views across the harbour, Rosemarie Weinstock says she's always loved living in her Darling Point apartment. The suburb has done well for her, with median unit prices growing by a healthy 15.6 per cent in the year to March and a solid 9.4 per cent a year over the past five years.

But now, she says, it's time to downsize to a high-rise block in the same area, leaving her huge apartment in a grand 1930s house that has been divided into three.

"I'm terribly sad to be leaving," says Weinstock, who admits to being "over 60". "I've been here since 1991 and I was in my previous house for 19 years. I think I'm a bit of a stayer." Weinstock has put her 240 sq m three-bedroom home on Mona Road up for August 9 auction with Laing+Simmons, Double Bay (0409 808 208) and Raine & Horne Double Bay (0419 224 455), with expectations of about $2.5 million.

"I can understand why Darling Point is so highly valued," says Weinstock, who used to own an architectural hardware company. "It can't be built out, it's right on the harbour and it's so handy to everything. It's a joy to live in a place like this."

MEDIAN APARTMENT PRICES FOR THE YEAR TO MARCH 2007. SOURCE: PRDNATIONWIDE:

Graphic: Robert Parkinson. Photo (top left): 703/21A Hickson Road, Walsh Bay, $3.2 million (Ray White Double Bay, 0414 312 131).