It’s never been a better time to own a home in Sydney’s eastern suburbs.
But buyers and sellers alike need to be up to speed with property trends and other factors to choose the right time to make a change.
Here’s your guide to seven changes we think will affect eastern suburbs property prices over the next seven years:
1. The light rail: connecting Sydney
While the eastern suburbs have always been well-connected by buses, a rail link has been sadly lacking from most areas. Although the light rail is not set to begin servicing Kingsford, Randwick and Kensington until 2019, we are already seeing homes advertised as being “close to” a proposed light rail stop. It is possible this will lead to an increase in house prices within walking proximity to the tram.
2. Interest rates: everyone’s talking about it
Speculation about interest rates has reached fever pitch in recent weeks after the RBA first announced in July that the new cash rate was 3.5 per cent. Upsizers and first-home buyers are most likely to be affected, as downsizers are often cash buyers and luxury buyers are often more ready to absorb rate changes. Of course, the best way to insure your property against interest rate changes is to buy in a unique and sought-after location, and the Eastern suburbs fits that description to a tee.
3. The economy: property a sound investment
As well as changes to interest rates, the economy is shifting in other ways. The share market has been volatile for the better part of two decades, often leading to poor returns on cash investments. So property has come to be seen as a less risky investment. Meanwhile, the weakness of the Australian dollar compared to the US dollar makes the acquisition of eastern suburbs real estate an attractive proposition for overseas investors and ex-pat Australians.
4. The ageing population: evolving needs
The latest census found that one in six Australians is now over 65. As people get older, their housing needs evolve, which is likely to lead to a growth in the number of downsizers and an increased demand for smaller homes with easy accessibility. A sense of community is very important for people as they age, as well as convenient access to amenities. There is also likely to be an increase in the acquisition of sites for development, to meet growing demand for retirement villages.
5. Population size: growing every day
In the five years to 2016, Australia’s population grew by over a million people: a growth of 1,037 new Aussies every day since the 2011 Census. Population growth leads to an increase in competition for housing, which puts pressure on house prices. This is likely to affect housing affordability, particularly in Sydney, our most expensive – and populous – city.
6. Redevelopment: on the horizon
With the development of new apartment blocks, the east is likely to have a rise in density of housing, increased construction, and growth of shops and amenities to meet increased demand. The recent change to strata laws, allowing the option to redevelop entire buildings if 75% of strata vote in favour, allows unit owners the freedom to sell to developers, which will see a number of new apartments come on the market.
7. Legislation changes: negative gearing and capital gains tax
There has been much discussion recently of changes to negative gearing and capital gains tax, with both major political parties raising these as an option. Some argue negative gearing has led to an increase in demand, which has led to price rises, while a decrease in capital gains tax has boosted investment. If legislation is proposed and passed, investors could be less attracted to real estate. Meanwhile, the suggestion that downsizers and first home buyers access their super to pay for housing may help ease pressure on the market.
While all these factors will likely influence the property market, the eastern suburbs remain a sought-after and unique location. Navigating these changes requires an agent with expertise and a clear understanding of the market. If you’re planning to sell your eastern suburbs property, don’t hesitate to get in touch with our team.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.