Sydney inner west – strongest property market or parking nightmare?

Auction clearance rates

Sydney’s inner west was recently dubbed by Dr Andrew Wilson from Australian Property Monitors as the hottest property market around metropolitan Sydney, a distinction based purely on auction clearance rates (see article below).

Although auction clearance rates is one of so many indicators of the strength of a property market, it should be remembered that auctions only account for a mere 12% of property sales in Australia. Therefore, to claim the inner west being the strongest market based purely on auction rates is somewhat misleading. Granted, its location of being so close to the CBD and attractions around Sydney makes certain suburbs in the inner west as popular as ever, especially among some of the young professionals and those seeking the hip and eclectic Sydney lifestyle.

The downside to inner west living is the level of human and car traffic where this locale is one of the most densely populated areas in the whole of Australia. You don’t even need to wait for peak hours to drive through King street along Newtown to understand that traffic congestion can drive people to avoid certain inner west areas like a plague. In addition, many properties around the inner west in suburbs such as Newtown, Erskineville, Surry Hills and Chippendale don’t have private car space or off street parking. Great lifestyle when you come home from a hard day’s work and having to circle your neighbourhood for half an hour only to find the nearest parking spot 100 metres away from your property. Better still, try carrying your six bags of groceries through 100 metres in the rain.

Some two-way streets in the inner west are so narrow that only one vehicle can drive through when cars are parked to the brim on either side of the road. Find an open driveway failing which you may have to reverse all the way back to where you came from depending on how you decide who has the right of way. Better still, try locating inconsiderate parkers who decided to dump their vehicle across your driveway (despite clear “no parking – day or night” signage on your gate as well as clear demarcation on your driveway) when you are late for an appointment.

To me, investing in the inner west in Sydney cannot be compromised with the absence of a car space as so many developers are increasingly building apartments that come without private parking. There may be an element of councils eager to keep millions of dollars raised from parking metres and fines each year and hence restricting the allotment of car spaces for new developments.

Private car spaces in the inner west are becoming so valuable that on-site parking for houses in Newtown, Erskineville and Marrickville can add between $70,000 to $120,000 to the value of a property. The inner west may offer a certain lifestyle to some but it certainly comes with a cost. As Sydney becomes even more congested in the near future, properties in the inner west which offer private and off street parking will become even more scarce and investors would be wise to tick this item on the investment checklist.

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Zenix, Erskineville ~ epitome of Sydney’s inner west city lifestyle

Zenix Tower, Erskineville

Zenix Tower, Erskineville

The Zenix in Erskineville is the flagship development of integrated property developer, Metroland. It consists of 100 one-bedroom apartments, 121 two-bedroom apartments and 3 three-bedroom apartments spread over a 11,531 sqm opposite the Sydney Park. This project was completed in 2003 at a cost of $80 million.

This development is located in a strategic pocket of Erskineville as it is a mere 150m to the St Peters train station which is only three stops from Central Station in the heart of Sydney’s CBD. Zenix is also within walking distance to the recreational facilities of Sydney Park, the cafes, restarants and shopping strip of King street in Newtown. It is also a 10-minute drive to Sydney University, Sydney airport, Broadway Shopping Centre and Chinatown.

Local residents enjoy this area for its eclectic, bohemian and trendy lifestyle which is synonamous with Sydney’s inner west.  Young professionals and the lifestyle conscious are attracted to this area because of its close proximity to Sydney’s CBD and the array of local amenities such as schools, hospitals, restaurants and shopping.

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7 Black Forest road, Werribee, Victoria

7 Black Forest road, Werribee

FOR SALE: 7 Black Forest road, Werribee, Victoria

Vacant land: 1001 sqm

Location: Corner of Black Forest road and Walls road, Werribee

Asking price: $259,000

Agent: Mr Haydon Lanyon, Elders Real Estate, Werribee. Mobile: 0407 068 729

This block of level and near rectangular land has double street frontage and is located at the corner of two main roads – Black Forest road and Walls road. It is within walking distance to the Werribee Racecourse and is approximately 3km from the Werribee train station.

Marina Bay Sands – Singapore’s world class casino resort

Marina Bay Sands, Singapore

Dawn of a new era: Marina Bay Sands, Singapore

The opening of the Marina Bay Sands (MBS) in Singapore on 23 June 2010 heralded a new era for the island republic. The integrated resort with a 2,561-room hotel, 120,000 sqm convention centre, shopping mall and its piece de resistance – a casino with 500 gambling tables and 1,600 jackpot machines has been billed as the world’s most expensive stand-alone casino property ever built at a cost of S$8 billion. This mammoth project where the centrepiece involves casino gambling has been widely seen as a gradual liberalisation of the government’s stringent policies to uphold moral and cultural values of Singaporeans.

Marina Bay Sands, Singapore

Marina Bay Sands, Singapore

Many business and political analysts believe the arrival of MBS also signifies another important arrival – that of the Singapore nation as a whole, onto the world stage of commerce and industry where it is now the leading financial and transportation hub in South East Asia. Its economic and social achievements have eclipsed on all accounts those of its neighbouring Malaysia, within which it was a former state until its own independence on 8 August 1965. Singapore’s population of 5 million people enjoyed the highest GDP growth in the world of 14.7% in 2010.

What are the key factors which are driving this Asian powerhouse?

First and foremost, Singapore was led by its founding prime minister, now Minister Mentor Lee Kuan Yew, whose government in the early years established systems which rapidly grew its potential as a busy sea port. It then harnessed a clear vision of a developed nation with high intellectual and financial capabilities interwoven with a strong sense of nationalistic and social identity.

Unlike neighbouring countries, Singapore is a small island state. With a total area of only 700 sqm, it is smaller than the Australian Capital Territory in terms of land area. With land being in such short supply, its core competencies cannot be predicated upon industries which require high land usage. Singapore has turned this land constraint into a core strength in promoting and nurturing high-intellect and high-value industries such as electronics, petro-chemical refinery, mechanical engineering, biomedical sciences, financial services, tourism, education and more recently, casino and high-level hospitality businesses.

Today, Singapore is one of the top three most busy ports in the world and is the fourth largest foreign exchange trading centre in the world behind London, New York and Tokyo.

Orchard road, Singapore

Shopping mecca: Orchard road, Singapore

On any given day,  its main street Orchard road and its surrounding areas in the CBD is a melting pot of business executives, city workers, shoppers, locals, tourists and visitors jostling and engaging in Singapore’s national past times – shopping and eating till 11pm. Indeed, Singapore has firmly established its reputation as a food and shopping mecca in South east Asia.

Real estate in Singapore

In the early years before its independence in the 1960s, Singapore was faced with housing shortages as a result of the shortage of available land. The ruling government passed the Housing and Development Act of 1960 and subsequently established the Housing & Development Board (HDB)  which is the statutory board responsible for public housing in Singapore.

HDB flats in Singapore

HDB flats in Singapore

Over the last 40 odd years, the Singapore government has built millions of high-rise apartments and flats, otherwise known as HDB flats, to house its growing population and to alleviate the problem of housing shortage.

For the majority of Singapore’s citizens, living in HDB flats is not by choice as the price of private and landed property are relatively very expensive due to the scarcity of land and many luxury condominiums and apartments built by private developers are beyond the means of an average Singaporean wage earner.

However, HDB dwellers enjoy a host of benefits such as subsidies for living closer to parents, better incentives if one is married and other transactional concessions. These HDB flats are controlled by the government where eligibility, purchase and disposal conditions apply and the majority are leasehold for 99 years.

In general, pricing for HDBs range anywhere from S$300k for smaller units in outer areas of Singapore to $800k for larger 3 – 4 bedroom units which are closer to the city. Obviously location and the prestige of suburbs, distance to Mass Rail Transit (MRT) train stations, design and size affect pricing.

As the affluence of Singapore’s middle class grow, so do the price level of new private housing and apartments. The lucky few who had previously held on to freehold landed properties have seen the value of their land appreciate to levels comparable to some of the most expensive cities around the world. New private luxury apartments and condominiums which are being built around the choice areas close to the CBD will command a price tag of at least S$1,200 per square foot upwards (1 square metre = 10.76 square feet).

Another indication of the growing wealth of Singapore’s middle class and its buying power is the number of advertisements in Singapore’s leading daily newspapers enticing wealthy locals to invest in up and coming luxury condominiums and apartments overseas. These new luxury investments span the breath of the Asia Pacific from Bangkok, Kuala Lumpur, Melbourne, Sydney, Auckland to London, New York and luxury ski-resort homes in Nendaz, Switzerland.

Strata SE1, the tallest residential tower in central London is actively seeking wealthy investors from Singapore. High-end Malaysian projects in the heart of Kuala Lumpur City Centre (KLCC) making news in Singapore include St Mary Residences and Quayside condominiums in Penang.

Far East Organisation is by far one of the leading property developers in Singapore having developed more than 700 projects over the last 50 years. New apartments and condominiums currently on the market in Singapore include the following:

1. Adria at Novena

2. The Cascadia at Bukit Timah

3. The Tennery, Bukit Panjang

4. The Orange Grove, Stevens Road

5. Twin Peaks, Leonie Hill Road

6. Prive at Punggol

7. Austville at Kangkar

8.Vibes at Kovan

9. NV Residences in Pasir Ris

10. Loft at Nathan Road

11. Cabana, Yio Chu Kang

12. Horizon Residences

13. The Glyndebourne

14. The Vermont on Cairnhill

Cameron Highlands – weekend escape from busy Kuala Lumpur, Malaysia

Boh tea plantation, Cameron Highlands

Boh tea plantation, Cameron Highlands

Located approximately 200km from Kuala Lumpur in the state of Pahang, Cameron Highlands is a leisurely 3-hour drive north along the north-south highway (PLUS). A new route from the exit at Simpang Pulai has drastically reduced travelling times compared to the more windy old road which leads up to Ringlet at the lower level of the highlands. The new road is much more efficient where it leads right to the top of Cameron Highlands in the town of Brinchang, where vast tracts of tea and vegetable plantations abound. The main road then leads downhill towards Tanah Rata (literally meaning “flat land”) where most of the commercial businesses, shops and accommodation are located.

One of the most exclusive resorts in Cameron Highlands is the Cameron Highlands Resort which was the old Merlin Hotel that was refurbished by the YTL Group of Malaysia. Rates start from about RM300 up to RM700 for a high end suite. This resort boasts a new Japanese restaurant, high tea with Cameron Highland’s own Boh tea and scones, beautiful koi ponds and commanding views over the golf course.

Tea and scones, Cameron Highlands Resort

Tea and scones, Cameron Highlands Resort

The attraction of Cameron Highlands to most locals is to escape the hustle and bustle of busy city life for a weekend in cooler climate where night time Celcius temperature can be in the low teens. Other activities include golfing at the main golf course in Tanah Rata, sipping the local Boh tea and scones in one of many Tudor style English settings, bush walking, bird watching and visiting the local growers’ markets, tea and vegetable plantations.

Cameron Highlands is also famous for its local strawberries and the bountiful fresh fruit is made into strawberry vinegar, jams, dried fruit and a multitude of other products.

Fresh strawberries, Cameron Highlands

Fresh strawberries, Cameron Highlands

In Malaysia’s colonial past, the English has built many quaint cottages and rest houses in the cool highlands to escape the tropical heat. Many of these homes have been preserved and  some have been turned into beautiful caretaker holiday homes.

Ye Olde Smokehouse Inn

Ye Olde Smokehouse Inn

Financial institutions also invested and built their own holiday homes for their senior executives and staff and over the last 30 years, Cameron Highlands has evolved from having individual holiday homes dotted all over Tanah Rata to include much larger service apartments, condominiums and hotels.

The rest house of Bank Negara Malaysia (Central Bank of Malaysia) is located in the heart of Tanah Rata on high elevation and its sprawling rose gardens command scenic views that overlook the valley and golf course beneath. Senior bank executives, their families and friends would occupy the 7-room rest house during long weekends and vacations where in-house caretakers serve up a mix of local fare such as steamboat and Western cuisine for its occupants.

Beef Wellington, Ye Olde Smokehouse, Tanah Rata

Beef Wellington, Ye Olde Smokehouse, Tanah Rata

Tanah Rata is also not short of good food for holiday makers as it has a variety of restaurants serving both local and Western cuisine to cater to tourists which come from as far as the UK, Europe, North America and Australia. Foodies can be spoilt for choice from tucking into tasty local fare such as mee goreng, tandoori chicken, roti canai and chicken masala to having beef Wellington and chargrilled rib-eye steaks at Ye Olde Smokehouse Inn or the Cameron Highland Resort.

Real estate in Cameron Highlands have been appreciating gradually in recent years. New apartments which are for sale in Tanah Rata range from RM250,000 upwards although most of these new developments do not have the quality finishing of international holiday homes. Design and workmanship of newer condominiums and hotels are very average at best and may be located next to shabby old houses and farmland. Vacant land around Tanah Rata range from RM30 per square foot (1 square metre = 10.76 square feet) up to over RM100.

Tanah Rata is the location to be as most of the luxury rest houses, attractions such as bushwalks, restaurants, shops and amenities are located around the golf course. In any case, Brinchang and Ringlet is no more than a 20 minute scenic drive from Tanah Rata.

Mist over the Boh tea plantation cafe & lookout, Gunung Brinchang

Mist over the Boh tea plantation cafe & lookout, Gunung Brinchang

Caroline Russell, CEO, Boh Plantations Sdn Bhd

Caroline Russell, CEO, Boh Plantations Sdn Bhd

One of the leading businesses in Cameron Highlands is Boh Plantations which is the leading tea grower in the highlands. The company conducts guided tours of its tea factories and sells its products on location in Gunung Brinchang.

The proof of the quality of its vast array of teas is served up in its cafe which overlooks the beautiful and undulating tracts of tea plantations.

Caroline Russell has perpetuated the pioneering efforts of her grandfather John Archibald Russell who started planting tea when he acquired freehold plots of land in Brinchang in the early years of the British colonisation of the then Malaya.

Ms Russell is Chief Executive Officer of Boh Plantations, a Malaysian citizen and an ambassador of the charming highlands which hold fond memories in the hearts of locals and foreign visitors alike.

Malaysia is encouraging eligible foreign citizens from all over the world along with their spouses and children to reside and retire in Malaysia under the Malaysia, My Second Home Program.

Children feeding koi - Cameron Highland Resorts

Children feeding koi - Cameron Highland Resorts

Tree change paradise in Orange, New South Wales

Canola fields along Excort Way, Orange

Canola fields along Excort Way, Orange

In recent years, many Sydneysiders have been looking for a lifestyle change in coastal and country towns to escape the stress and congestion of city living. One such town that has been slowing making its mark is Orange in the heart of central New South Wales.

Located approximately 250km and a leisurely 3.5 hour drive from Sydney, Orange offers a more quiet and peaceful setting whereby locals can enjoy a booming food and wine culture, fine dining restaurants which have garnered rave reviews from the Sydney Morning Herald Good Food Guide, vast open spaces, good local schools, medical facilities and most importantly, affordable housing and real estate.

Table for lunch, one-hatted Lolli Redini restaurant

Table for lunch, one-hatted Lolli Redini restaurant

Food and wine culture

Food and wine culture - cooking school

Property prices in Orange have enjoyed an average annual growth of about 9% over the last 10 years and recorded a growth of about 8% in the 12 months to August 2010 during the recent property boom. New mining activity and a proposed new hospital in the south of Orange has boosted employment in the area and augurs well for investors in the future. Charles Sturt University has also established a new dentistry department on campus.

Local real estate agent and principal of Ray White Orange, Libby Seaman, said there seems to be little slow down in activity in Orange despite the slow down in sales activity, auction clearance rates and price growth in Sydney and Melbourne in recent months.

Real estate in Orange

Do me up - old home in Orange

Another agent, Christine Norris who is licensee of PRD Nationwide Orange said investors in Orange are mainly from Sydney who are looking for investment opportunities which have solid growth rates and strong tenancy demand as a result of local schools especially in east Orange and new growth and development areas to the north of the city.

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5 Maxweld street, Ardeer

5 Maxweld street, Ardeer, Victoria

FOR SALE: 5 Maxweld street, Ardeer

Property: 2 bedroom 1 bathroom

Price range: $280,000 – $300,000

This property was sold at auction on 20 November 2010 for $365,000

Situated in a residential area which is close to schools, parklands, bus and train station in Ardeer, this property sits on a land area of approximately 603 sqm (15.24 m x 39.62 m). It is under instructions from the State trustees and has potential for subdivision subject to Council approval.

Emerging suburbs in Sydney and Melbourne

top 5 melbourne $500k cover pageInvestment guide to three evolving sydney suburbsTop 4 Sydney undervalued cover page

According to economic forecaster BIS Shrapnel, renters will have to get used to annual increases of between 5 – 7% in Perth, Brisbane and Sydney, 3 – 5% in Melbourne, Hobart and Adelaide over the next 24 to 36 months. BIS Shrapnel analyst Angie Zigomanis said new dwelling construction had not been adequate over the past 12 months and expect rental growth to pick up again. Housing analyst have forecast rent to rise across all Australian capital cities as new home construction fails to keep up with demand, home borrowing stabilises at weaker levels and population continues to grow.

For obvious reasons, many renters choose to live in popular inner city suburbs which are close to public transport, amenities, shopping with lifestyle. These choices have enabled inner city precincts to record strong growths compared to areas which are further away from CBDs.

On the other hand, there are pockets within inner city areas in many capital cities which have been “over-shadowed” by their more illustrious neighbours. Suburbs such as Narraweena and Wareemba in Sydney are only a hop and jump away from its more well-known neighbours of Dee Why and Drummoyne. A couple of strategies in dealing with rising rents may be to locate these inner city pockets with good public transport links and amenities which have been ignored time and again. Another strategy is to look a little in suburbs which may be a little further but still enjoy good transport links into the city. It is important if buying into these suburbs which offer relatively more affordable entry points and cheaper rent to ensure they have a strong track record of growth.

The important criteria is these suburbs MUST have recorded growth rates of at least 12% over the boom in the last 18 months and an average growth rate over the last 10 years of not less than 10% per annum. Suburbs which did not experience significant growth over the last 18-month boom is  indication the suburb is short of important growth drivers such as transport links, distance from CBD, public amenities and conveniences such as schools, hospitals and universities and general public appeal.

The reports above identify key investment propositions such as emerging trends, new infrastructure developments, private investments in emerging suburbs and puts its capital growth rates and records to the test.

49B Chelsey street, Ardeer, Victoria

49B Chelsey street, Ardeer, Victoria 5

Asking price: $165,000 – $185,000

Property: 300 sqm vacant land

Agent: Robert Christakakis, Bells Real Estate Sunshine, Mobile: 0407 517 761

This is an opportunity to build a townhouse on street frontage allotment of approximately 300 sqm.The plans are for a 2 bedroom, study, open kitchen, meals and living areas, large walk-in-robes, 2 toilets and a single garage. This property is brilliantly located only minutes from Sunshine Shopping Centre, Brimbank Shopping Centre, schools and the Western Ring road.

78 Blanche street, Ardeer, Victoria

78 Blanche street Ardeer 1

FOR SALE: 78 Blanche street, Ardeer

3 bedroom 1 bathroom 1 car space

Auction: 12.30pm Saturday, 30 October 2010

Price range: $370,000 +

Agent: Martin Artigas, Bell Real Estate, Sunshine Mobile: 0407 808 932

Update: This property was sold prior to auction at an undisclosed price of more than $400,000.

This brick veneer residence is located within a quality residential pocket with an allotment of approximately 690 sqm with potential for re-development (STCA) in the future.

It has 3 large bedrooms, sun-filled formal lounge and dining, kitchen with meals area, central bathroom and large laundry facilities with second shower.

This property is located close to amenities, with easy access to the Western Ring road and Kororoit Creek walking trails.

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