NSW Sydney Lower North Shore - Why low capital gains?

Just a question on Sydney lower north shore suburbs (Neutral Bay, Artarmon, Chatswood,Mosman, Cremorne, Cammeray, North Sydney etc.).

Since 2011, Sydney dwelling prices have gone up by good 70-80% in growth suburbs (innerwest, blacktown, liverpool, lakemba & surrounds).

However, the growth for the premium suburbs has been a lot modest in comparison. For example, units in lower north shore have gone up by just 40% and houses aren't much better either.

Leaving the waterfront & water views properties aside, a typical 3 bed room unit/townhouse in small block in lower north shore isn't that much more expensive compared to same area unit/town house in some of the inner west suburbs like Summer Hill or even Concord West, Strathfield etc..

Why is that?

 

Affordability. The lower north shore areas come off a higher base. Less people can afford them therefore they didn't go up as much percentage wise.

 

Possible.

Interestingly, at 4% interest rate, some of the units sold in last 3 months are cashflow positive on gross revenues but I am sure most will have high strata fees.

 

This is the reason I feel relatively comfortable with our PPOR in Sydney's eastern suburbs, smack bang between Bondi and the CBD- the price was almost on par (maybe plus 5%) of apartments you can find 10-30km out of Sydney- it baffles me why this is the case but in the mean time, I enjoy my 17 minute commute door to door

 

In late 2014 I bought my spilt level 1br unit close to city, 4 minutes walk to Redfern Station, (or no more than 15 minutes stroll to Central Station) for marginally more than what I could buy a 2br unit out in Parramatta at the same time.
I figured it was a no brainer.

Lose a bedroom but gain heaps of convenience...

 

Couple of reasons usually
1. New is always better </sarcasm>
2. The units out west are bigger
3. Their friends and family live there (in Western Sydney)
4. Eastern suburbs don't have a train line (I'm talking Moore Park and south of that).

Would i personally live in the Eastern suburbs or Upper North Shore? Yes. But the biggest thing stopping me is family. All family (parents and siblings) are between 5-10mins drive, and when there are kids, that family network is by far the best thing you can have.

 

You aren't competing with families demographic (proximity to good school, a little more space) but suburbs like Artarmon have good school catchments, good sized units but still prices are depressed compared to inner west.

 

The generation of low/low-middle class migrant families that grew up in the west and now have high paying jobs and want to stay "close" to their families while wanting to live in trendy suburbs.

I don't think that combination is as prevalent on the upper north shore

 

Access to unis is another problem. Asian uni students + wealthy parents + easy access to a university makes a difference.

I am a migrant, went UNSW 10 years ago. We lived in inner west mostly and never considered lower north shore.

Now our kids are in primary school and we have no option but to move to somewhere on north shore where good public schools are.

 

All the more reason to move there imho.

If you look at some of the closer areas of the LNS Artarmon has alot of older unit stock and few sites available for redevelopment, its lack of a supermarket and lots of housing for the socially disadvantaged all contribute. Chatswood has gone cbd high-rise. You'd be hard pressed to find a 3 bed modern unit in Lane Cove for sub-800k with new builds topping $1m.

 

We can't afford low/low middle on the LNS we prefer established $$. The crowd you mention live at Mosman of the west, Strathfield.

 

Strathfield isn't too shabby

Every week i look at Sydney Auction results. Earlier in the year, i saw a house strathfield sell for $4.3m i think and on the same weekend and much nicer house (in my opinion) sold in Castlecrag with waterviews for $4.5m.

If i had that much money, would I still live in Strathfield..... and the answer is yes.
Except i would buy that $4.5m, rent that out and continue living in the tiny house I'm in now... then ill move into the house in LNS in the future

 

buy a $4.5m IP and rent that out??!!
seriously??!

 

Definitely not on my list. Western suburbs of Sydney, old stomping grounds of the not quite so honorable NSW ex-MP (more recently of the lower north shore), generally devoid of trees & ridiculously hot in summer.

A few nice houses but I'd be looking at the upper north shore in that price range.

 

What do you think of this 4br one for $6.8m?!

Sold Price for 23 Newton Road Strathfield NSW 2135

No.47 sold for $25k more in May this year but is a 7br.

 

The North Shore even in it's hey-day was a weird place anyway. It had lots of bush and new roads but that's all in the past now. In actual fact, the Pacific Highway is just a nightmare. It's difficult to get anywhere and it's boring. Plus you have to put a plum in your mouth and drop names and constantly tell everyone about the expensive school you went to - leave out the part about all the bullies.
Yeah nah Inner and outer west is much more interesting and easier to get around. Great food. The Eastern suburbs is the place to be seen sporting your brand name sunnies and abs.

 

Definitely give me the old character home any day of the week... the modern home will just look soulless/nothing special in 10-15 years.

 

same here. strathfield has big blocks and old mansions...charming.

 

Absolutely @WattleIdo - no trees left on the north shore due to the actions of successive governments hell bent on making the north shore look as drab as the West. Selling off road corridors and bluegum forest. Pathetic rail system (only two lines to the city vs 8+ from the west), a disjointed freeway/highway (oh the west has one of those as well). No beaches of any quality on this side of the bridge, I might have to catch a wave in Homebush Bay when a westerly is blowing.

 

You are going to pay so much land tax on it every year so that you will move straight back to it very quickly.

That's one thing I learnt about owning properties in NSW. Always live in the property with the most expensive land value.