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Sydney’s top suburbs for terraces

134 Riley street, Darlinghurst 1

FOR SALE: 134 Riley street, Darlinghurst, Sydney

Sydney residents have had a long love affair with terrace houses from the early days. It is warm and comforting sipping tea in a courtyard and leaning over the wall to exchange notes about what’s on the dinner menu with a neighbour.

Many older style and dated terraces in some Sydney suburbs have since been transformed by owners who have a knack for clever home designs, small renovations and refurbishment. Period features are being replaced with the latest modern conveniences and state of the art TV and sound systems. The result for these carefully planned upgrades are often spectacular ~ modest from the outside due to limiting restrictions in changing the facade but with “wow” factor interiors.

Selected Sydney terrace suburbs by median prices as at April 2010 are as follows:

Rank

Suburb

Distance from Sydney CBD

$

1

Paddington

3

1,235,000

2

Glebe

3

850,000

2

Surry Hills

3

850,000

4

Alexandria

4

780,000

5

Redfern

3

752,500

6

Leichhardt

6

700,000

7

Erskineville

5

670,000

8

Darlinghurst

2

595,000

Source: Australian Property Monitors, April 2010

Comparing statistics from a year ago, selected Sydney terrace suburbs by median prices as at April 2009 were as follows:

Rank

Suburb

Distance from Sydney CBD

$

1

Paddington

3

1,230,000

2

Bondi Junction

6

900,000

3

Darlinghurst

2

865,000

4

Surry Hills

3

792,225

5

Glebe

3

770,000

6

Darlington

2

705,000

7

Redfern

3

700,000

8

Newtown

5

650,000

Source: Australian Property Monitors, April 2009

What I like about terraces

  • Personally, the close proximity to Sydney CBD for most of the top terrace suburbs is the key attraction. From an investment point of view, a good quality terrace in a top Sydney terrace suburb has experienced strong capital growth and will continue to do so in the future due to its scarcity factor. Rental yields will not be high due to the price factor but over the long run, capital growth will more than compensate rental returns.
  • Terraces appeal to a wide spectrum of owners and renters alike, especially in Sydney as these dwellings allude its own character and charm. The profiles of these occupants include young professionals, Sydney’s vibrant gay community, people who work in the arts and creative industries, food lovers, high-fashion followers and hospitality professionals who enjoy inner city living for its array of notable cafes and restaurants, shopping and convenience of commuting to work. For investors, there is rarely a shortage of quality tenants for this type of dwellings.
  • Some terraces are old and dated and herein lie enormous hidden opportunities to upgrade and add significant value. Astute investors can significantly create new equity by carrying out well-designed renovations which appeal to its target market.

What I dislike about terraces

  • Most terraces do not come with car space and being located so close to the city, parking can often be a nightmare although certain suburbs have resident designated street parking. Even then, most terrace suburbs have very limited parking and streets can sometimes be narrow and extremely congested with vehicles which affects the streetscape of the suburb. It is best to always find a terrace with at least 1 car space which is usually a lock-up space within the external compound.
  • Terraces are not free-standing dwellings and some investors will never commit their investments to these type of housing. Those who invest in terraces are usually owner-occupiers who “fall in love” with terrace living and the lifestyle factor. From an investment point of view, the price of a terrace can usually offer alternative investments in free-standing dwellings with ample car space and a huge backyard in good suburbs and locations.
  • The long rectangular layout plan for most terraces means living areas are usually separated as opposed to the feel of an open concept that a house with a large backyard can offer. However, clever floor design can sometimes integrate living spaces to overcome this constraint. Staircases and corridors can be very narrow and it is not uncommon for bedrooms to be located over 3 levels. The size of backyards and courtyards can be small and usually further reduced and compromised by the secured car space.
  • Some terraces only come with 1 bathroom and toilet. Moreover, this facility may sometimes be located on the first or second level and is not ideal for the convenience of guests and may affect the privacy of occupants if guests have to wander upstairs. On the other hand, if this single bathroom and toilet is located on the ground level, then it also affects the convenience and privacy of the occupants in the event bedrooms are located on the first or second levels. This kind of layout may not be suitable for families or occupants of more than 2 people and limits the potential tenant market for investors.

Most affordable suburbs to buy a house in Australia

15 Kurrajong Crescent Melton @ wealthruproperty.com

3-bedroom house on Kurrajong Crescent, Melton South, Melbourne

Based on research by Tim Lawless, Director of Property Research at RP Data an appropriate benchmark for affordable capital city houses in Australia is $350,000 whereby there are still many opportunities to buy a house below  this price in most cities. Hobart and Canberra are the most affordable and least affordable capital cities in Australia respectively based on the number of suburbs with a median house price of $350,000 or less.

Below is the list of most affordable capital cities in Australia:

Rank

Most affordable capital city

# suburbs < $350k

Total # of suburbs

%

1

Hobart

30

70

54.3

2

Adelaide

96

327

29.4

3

Melbourne

87

392

22.2

4

Brisbane

70

328

21.3

5

Sydney

130

625

20.8

6

Perth

25

259

9.7

7

Darwin

0

39

0

8

Canberra

0

84

0

* Note: All analysis is based on suburbs with at least 10 sales over the 12-month period to January 2010.

As at January 2010, Gagebrook in Hobart was the most affordable capital city suburb in Australia where median price was $153,000.

Hobart is the most affordable capital city with a median house price of $342,000. The median house price for capital cities over the three months to January 2010 are as follows:

Rank

Most affordable capital city

Median house price $

1

Hobart

342,000

2

Adelaide

395,000

3

Brisbane

460,000

4

Melbourne

489,000

5

Perth

490,000

6

Darwin

515,000

7

Canberra

545,000

8

Sydney

572,000

The 5 most affordable capital city suburbs for houses are as follows:

Suburb

LGA

City

# sold

Median price $

12-month change %

Avrge 10-year growth %

Dist CBD

Gagebrook Brighton Hobart 26 153,000 7.7 15.9 16
Clarendon Vale Clarence Hobart 27 155,500 -4.9 14.5 10
Primrose Sands Sorell Hobart 51 180,000 5.9 14.3 28
Bridgewater Brighton Hobart 50 180,500 6.2 14.6 19
Rokeby Clarence Hobart 58 190,250 0.9 13.3 9
Elizabeth South Playford Adelaide 39 200,000 4.2 13.6 21
Smithfield Plains Playford Adelaide 42 200,000 8.1 15.7 28
Elizabeth North Playford Adelaide 56 200,500 -1.2 13.8 26
Davoren Park Playford Adelaide 125 202,000 2.5 14.4 27
Elizabeth Playford Adelaide 13 210,000 -6.3 12.7 24
Lamb Island Redland Brisbane 15 205,000 -3.5 n.a 39
Russell Island Redland Brisbane 87 220,000 -6.8 14.9 42
Macleay Island Redland Brisbane 94 240,000 -7.0 13.2 37
One Mile Ipswich Brisbane 53 245,000 -3.9 13.3 34
Leichhardt Ipswich Brisbane 91 249,000 0.0 14.1 34
Millgrove Yarra Ranges Melbourne 48 218,500 1.2 11.9 61
Melton South Melton Melbourne 206 222,000 10.9 9.4 35
Melton Melton Melbourne 236 225,000 3.9 9.5 35
Frankston North Frankston Melbourne 123 237,500 4.3 12.1 39
Diggers Rest Melton Melbourne 29 240,000 6.0 8.8 32
Hillman Rockingham Perth 51 280,000 2.0 12.7 38
Armadale Armadale Perth 219 284,000 2.2 14.2 26
Parmelia Kwinana Perth 141 288,000 2.1 13.8 33
Camillo Armadale Perth 109 290,000 -1.7 13.5 23
Brookdale Armadale Perth 48 297,250 2.5 14.8 27
Moulden Palmerston Darwin 75 392,000 17.9 11.7 15
Gray Palmerston Darwin 53 409,000 14.2 11.9 15
Humpty Doo Litchfield Darwin 113 419,000 -1.9 11.2 33
Karama Darwin Darwin 72 420,500 8.7 9.8 11
Driver Palmerston Darwin 62 437,500 19.9 10.9 15
Chamwood ACT Canberra 44 351,000 3.2 13.4 13
Macgregor ACT Canberra 227 370,000 9.0 10.6 14
Ngunnawai ACT Canberra 98 380,750 5.8 10.1 12
Holt ACT Canberra 72 392,500 5.9 12.0 13
Casey ACT Canberra 47 395,000 n.a n.a 13
Wilmot Blacktown Sydney 34 219,500 9.8 9.2 41
Tregar Blacktown Sydney 63 220,000 8.9 9.6 40
Lethbridge Park Blacktown Sydney 68 225,750 9.6 9.6 40
Whalan Blacktown Sydney 72 229,975 6.7 9.0 39
Blackett Blacktown Sydney 51 230,000 9.5 10.6 38

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