The median unit price in some Sydney suburbs is lower than it was five years ago. Seeing as 2018 was the housing market’s worst year in a decade, that’s saying something.
But is there cause for panic? Not really. As people continue to be priced out of higher markets, there will likely be a pick-up in unit prices across the board. Still, the value decline in some areas serves as a reminder to potential buyers to exercise due diligence and consider supply before they buy.
Though we are facing a much-publicised housing crisis spurred by a chronically undersupplied market and record levels of immigration, new apartment development has still outpaced demand in some neighbourhoods. As a result, prices have dropped in areas like Harris Park and Rose Hill.
According to Domain data, the median unit price over the year to June was down 18.3% from five years ago in Harris Park, to $425K. In neighbouring Rose Hill, five-year growth was at -17.7% with a median of $470,750. Both neighbourhoods have been affected by a high supply of apartments and new construction in the area—underlining the importance of buyers gaining a clear understanding of the volume of new developments coming into the areas they are looking to buy in.
With the pandemic re-calibrating people’s relationship with their workplace a trend to replace smaller inner city apartments with more living space in outer regions began to emerge. Rushcutters Bay, which unexpectedly topped the list, resales of smaller units have brought down the average. The Eastern Suburbs enclave recorded the steepest median unit price fall, down 19.4% from half a decade ago. At $690,000, the declined value is likely due to a high investor/entry-level stock that’s been trading a lot more—think smaller studio or one-bedroom units with minimal growth potential. A large number of higher-end sales five years ago may have also boosted the Rushcutters median in 2018.
Following close behind with a 19.2% drop in values with a median of $727,500 was Chippendale, which has also seen significant high-density development nearby in the past half decade. Those hoping for capital growth will want to look for rare homes with scarcity value in medium-density rather than high-density areas. Essentially, the higher the density of new apartments being built, the lower the price of your property.
Further west, in Blacktown, the median unit price was down 18.9% to $430,000. Here, in one of Sydney’s most multicultural neighbourhoods, some owners have had to sell their properties at a loss this year. In June, a two-bedroom, two-bathroom apartment on Fifth Avenue sold for $20,000 less than in 2015, from $425K to $405K.
From Eastgardens to Eastwood, performance is similar. In the former, median unit values dropped 18.9% to $913,778, while in Eastwood, a -17.8% growth compared to five years ago was recorded. Here, in April, a 2nd floor studio apartment sold for $175K, despite the same apt selling for $212K in 2016.
In the south-western Sydney suburb of Wiley Park, unit medians were down 16.7% to $395K. Perhaps one of the more unexpected suburbs where property prices have lost ground over five years was Redfern. The inner-city neighbourhood enjoyed a huge transformation this past decade from student sharehouse suburb to a more affluent area populated by young professionals. Nevertheless, it recorded a 10.5% fall in unit values to $939,500, knocking it just under the million-dollar medium. Nearby, in Glebe, prices are down 15.2% from half a decade ago, with a current median of $890K.