Sydney Middle Ring Affordable Houses Overview
The Sydney Metropolitan Area experienced significant house price increases in 2010, buoyed by second and third home buyers upgrading their residences. This resulted in a decline of 54 per cent in the number of house transactions below $500,000 from the September 2009 to September 2010 half year period. With affordable house stock becoming scarce and higher ongoing costs associated with the ownership of strata titled dwellings, many potential buyers are now becoming long term tenants facing ever increasing rent prices.
In light of repeated reports about Sydneys house affordability and the demise of the Australian Dream of owning ones own piece of land, PRDnationwide Research created this report to identify the areas within Sydneys Middle Ring (20 km radius from the CBD) where affordable house stock can still be found. Suburbs with little activity below $500,000 were not included in this report in an effort to filter out discrepancies which can alter the final market figures.
In total 1,105 transactions below $500,000 were recorded during the September 2010 half year period, representing a decline of 50 per cent from 2,214 house sales during the same period in 2005 and an 87 per cent decrease from the September 2000 figure. This highlights the sharp decline in affordable housing in Sydneys Middle Ring.
The top ten suburbs which recorded the highest house sales activity below $500,000 are supported by road transport links to the growing business centres of Parramatta and Bankstown. Many also have a direct rail link to the Sydney Central Business District with an average travel time of 35 minutes to Sydneys Central Station
Top Ten Middle Ring Suburbs Recording House Sales Activity below $500,000
Yagoona experienced the highest number of house sales below $500,000, recording 62 transactions for the six month period to September 2010, representing 65 per cent of the total sales in the suburb during the period. The predominantly residential suburb of Yagoona is located approximately 16 kilometres southwest of the Sydney CBD with a commercial area along the Hume Highway, the main arterial road for the region. Yagoona is also serviced by the Bankstown Rail Line which offers a 38 minute train ride to Sydneys Central Station.
Chester Hill recorded 53 transactions below $500,000 for the six months to September 2010, accounting for 83 per cent of the house transactions for the suburb during the period. Chester Hill is located in the Local Government Area of Bankstown, 19 kilometres from Sydneys CBD. Despite an array of amenities including the Chester Hills Shopping Centre and train station, the suburb has managed to maintain a high level of affordability recording a median house price of $429,500. This represents a growth of 6 per cent in the twelve months to September 2010.
Of the top ten suburbs, Punchbowl experienced the highest growth in the median house price for the year to September 2010. The suburb is well serviced by both rail and road, and its proximity to Bankstown City Centre helped it achieve a median house price of $495,000 as at September 2010, representing a significant growth of 17.9 per cent from the September 2009 median price of $420,000.
An affordability comparison between the September 2010 half year and the same period in 2009 reveals an average decrease of 41 per cent in transactions below $500,000 for the top ten suburbs.
Greenacre recorded the sharpest change in the number of transactions below $500,000 recording a drop of 77 transactions or 60 per cent from the September 2009 half year figure of 179, to 52 transactions in the equivalent period in 2010. Consequently the suburb experienced an 11.1 per cent increase in the median house price to a figure of $500,000 in September 2010.
The most affordable Local Government Areas (LGA) were Bankstown, Auburn, Canterbury, Parramatta and Rockdale. In the Bankstown LGA, 36 per cent of the 1,039 house transactions recorded in the six months to September 2010 were below $500,000, while the Auburn LGA registered 167 sales below $500,000 representing 48 per cent of total house sales in the region.
Limited affordability is apparent in Sydneys Middle Ring Suburbs, where movements between price brackets have significantly reduced the number of sales below $500,000 even in suburbs that were considered affordable. In the short term it is expected that selected suburbs will continue to offer affordable houses, however, in the medium to long term, it is all but a certainty that affordability will only remain with outer suburbs houses or middle ring apartments.