NSW Sydney Eastern Suburbs Price Drop

Yep I agree, and i see most good area 2 bedder units holding most of its value . Hence my earlier post saying I see the best value in semis/houses for this particular area. Probably because demand is lower at this price point as many ppl can't afford it/will have more trouble to get finance.

I know exactly where you are coming from mate . I am looking to snap up such stock over the next 18 months. What I'll be looking for is older 1 storey 2 bedder on decent street. I think in 12-18 months 1.7m will be possible. Then knock down walls first storey to have open plan and build a second level . I see this as a really good way to add value and hold for next boom. If done right there would also be equity created on reval. Also for a ppor you'll get to design it how you like.

Alternatively, Buy an older 2 storey and do a complete reno. The reason I won't buy newish stock is to avoid paying the premium and I know i can build it for less and add value . So win win.

 

Thanks @Sackie. Agree makes sense. Buy the cheapest $/sqm land and work it up from there.

If you were redeveloping a 2 bed unrenovated semi and thinking of turning into a 3/2 upstairs with open plan downstairs, what sort of cost range or $/sqm do you work to for the typical spec in this area? Appreciate this is a “how long piece of string” question.

 

Well I'd be doing a open living downstairs plus office/bedroom and then 4 bedrooms upstairs. Medium to high spec total sqm around 200-220....i think cost will be around 500-600k.

So if you can get it at 1.7m then we're talking

 

Yeah great - good hunting!

 

Hey Jodes this is definitely happening...in places like Bondi people got in with in FOMO (Fear of Missing Out)....now some have realized after paying mortgage for 1-2 years...that prices are coming off fast now they have FONGO (Fear of Not Getting Out)....you see this with amateurs every cycle.

For example...where i live houses which sold for $3m ...are now at $2.5m and still dropping. The Eastern suburbs does also goes down. May not 30%...but I can see 15-20%....in places like Bondi ....

 

@John_BridgeToBricks An interesting "trick of the trade". In most suburbs in Sydney, the median price of a unit is 1/2 the median price of a house. This will then depend on the location, proximity to CBD, transport, amenities, etc.

Can you please elaborate more on the house/unit value analysis? From what I can see in the chart above, the price in units is a lot stable (slightly increase over 3 years) than that of houses, that is, capital growth in units is not as great as that of houses. And also with the land component in a house, houses always win.

 

Hi AUNZ,

Houses with land are better investments, there is no doubt about that. However I think the volatility in the data set for houses is based on two things: 1) the size of the land , and 2) the developer premium that some land carries can swing throughout the cycle.

1) The size of the land: this can play with the median data because some years large blocks will be sold, and other years smaller blocks will be sold. And there is usually a jump in price when a block goes above 550-600sqm, above which it becomes developable.

2) Sometimes there are large blocks of land, but the property development market is flat. So the premium for devlopment blocks can swing depending on where you are in the cycle.

Units are more stable, and they just chug along like an annuity producing monthly income as a sort of inflation hedge. But there is no potential.

Hope this helps.