Lower North Shore Property Watch Q3 2013
The current market proved attractive to a mix of local and overseas buyers. Anecdotal evidence pointed to strong demand for one or two bedroom apartments, giving buyers the option to lease out or occupy. Some overseas investors who initially purchased a residential unit to accommodate their children while they attended university later used the unit as a conduit to further investment in residential and commercial properties in Australia. Demand for student accommodation will also be met by the development of a new IGLU student housing on Albert Avenue, Chatswood. The central location will allow students to conveniently access the education hubs of Macquarie Park and Sydney. the facility is expected to open in the second half of 2014 and accommodate 396 students.
Observing the Unit Price Point chart to the left showed a large concentration of sales around the median price, with the $600,000 to $699,999 price point accounting for 20 per cent of transactions. Toward the top end of the market 13 per cent of units transacted for $1,000,000 plus while at the bottom end only seven per cent sold for $400,000 or less. In the six months to May 2013 the largest unit markets of Mosman and Chatswood recorded 210 and 142 transactions respectively. Activity in both suburbs remained steady compared to the corresponding period in 2012, while activity in Cremorne, the third most active suburb, increased by 14 per cent over the period.
PRD Research conducted a resale analysis to ascertain the average annual growth achieved by vendors who sold their unit in the May 2013 half year period. The analysis revealed an average appreciation of four per cent per annum, with an average holding period of eight years and eight months.
The house market experienced slightly softer conditions, with the median price remaining at $1,450,000 while activity declined by 3.7 per cent from May 2012. The largest increases were recorded in the $1,200,000 to $1,399,999 and $1,800,000 to $1,999,999 price points, while sales under $1,200,000 and between $1,400,000 and $1,599,999 declined.
The table below lists the largest developments currently under construction in the region. Chatswood recorded robust development over the past two years, with all major developments located within 200 metres of the train station. Units under construction totalled 1,348 in Chatswood followed by the suburb of Lane cove with 651 apartments across 11 projects. Zoning restrictions in Lane Cove resulted in an average of 59 units per development compared with the Chatswood CBDs average of 225 units.
Data released by the Department of Housing pointed to small gains in the median rent price across the four council areas over the 12 months to June 2013. Little change was recorded in the median rent for a one-bedroom apartment, increasing by 2.2 per cent in the North Sydney municipal area and softening in the Lane Cove LGA. The median rent for a two-bedroom apartment increased by over three per cent in the Mosman and North Sydney LGAs, while the Lane Cove council area recorded a modest growth of 1.1 per cent. The highest median rent for detached houses was recorded in the Mosman council ($1,515 per week) and the lowest was found in Willoughby ($895 per week).