How much will a Sydney home really cost you today?
As you might already be aware, Sydney is the most expensive capital city in Australia to buy and rent established houses and new apartments. Today, the median dwelling price in Sydney according to CoreLogic RP Data is $732,500, and for a house the median price is $850,000, whilst a unit now stands at $630,000. However, prices are literally going through the roof where buyers will pay over $1 million for a house within 5km of the city.
And if you think that’s absurd, a rundown house in Annandale has recently sold for $1.87 million. It’s crazy to think that a property full of mould with no kitchen and broken floorboards and in need of some serious renovation and TLC can fetch almost $2 million.
It nails home the fact that Sydney prices are ridiculously high and the market is red hot right now, yet buyers are still willing to pay these high prices for them as Sydney rides through the boom phase of the cycle. Even the recent Darling Square development has sold one bedroom apartments just 50 square metres in size from $800,000, with all 381 apartments selling out in just 5 hours.
This four-bedroom, two storey Annandale house that has belonged to the same family for over 60 years, is expected to need $1 million of renovation work to bring it up to modern day living. Once complete and habitable, it is thought that this property could fetch between $2.2 million to $2.5 million, or approximately $1,500 a week in rent.
Buyers and investors need to remember that Sydney prices are staggeringly high, but prices are not going to slow down any time soon, so if you are looking to buy property in Sydney then you need to do so quickly to avoid missing out on the growth and capital gains potential.
However, you don’t need to pay in excess of $1 million for a property. Yes property prices are high in Sydney, and today you are more likely to be paying at least $550,000 for a one bedroom brand new apartment, compared to a year or two ago, where you could have bought a one bedroom apartment for approximately $400,000 in certain suburbs.
There are still pockets of areas with growth potential at more reasonable prices, reasonable for Sydney anyway. You do need to look further out of the inner city though, and head further south or west to find these property bargains, but you need to be realistic of what your money can get you today, as it is much different from a year ago. You also need to bear in mind that by avoiding buying property in Sydney today, you will face even higher prices in the not so distant future.
Published on 27th of May 2015 by Marty Stanowich