Upwardly mobile Waterloo, Sydney, shows impact of urban regeneration

Urban renewal has changed the character of the inner-south Sydney suburb of Waterloo.

The suburb has shaken off a reputation for crime and its low socio-economic profile to become a sought-after location for inner-city apartment living, with a number of major apartment projects currently underway.

Census 2011 figures analysed the Australian Financial Review show that Waterloo is Australia’s second most upwardly mobile suburb, with weekly household income rising 167% between 2001 and 2011.

The suburb ranks someway behind Madeley, a north Perth suburb, where median income has risen nearly 300% from $435 per week to $1,846. However, Madeley was farmland 10 years ago before the land was turned over to property developers.

Waterloo is the only inner-city Sydney suburb in the top 20, a list dominated by Perth suburbs benefiting from the flow-on effects of the mining boom that noticeably includes the Queensland mining towns of Chinchilla and Emerald.

The top five upwardly mobile suburbs are:

Source: Australian Financial Review, Census 2011

Census data shows that the Waterloo population increased by 2,000 from 8,500 in the 2006 census to 10,600 according to 2011 census. 

The vast majority of dwellings in Waterloo – 81% – are apartments, catering for singles or couples, with 23% of all dwellings being one-bedroom units and 53% two-bedroom units. 

Waterloo alongside Redfern and Alexandria is heading towards a 70% single-person occupancy rate, according Whiterock Residential Projects, which is developing two projects in Waterloo. 

According to RP Data, the median unit price in Waterloo is $513,000, down 5.7% on the same time last year, but prices are up 20% over the past five years.

The median rent is $550 per week, equating to a relatively high yield of 5.6%.

The revitalisation of Waterloo was kicked off around 2004 with NSW government creating the Redfern Waterloo Authority (RWA) with the objective of revitalising the suburb.

Since then there has been a marked drop in crime along the more recent establishment of popular eating destinations such as the Dank Street Bakery and Fratelli Fresh and Fountain Street in neighbouring Alexandria.

Waterloo is also within walking distance of the largest urban renewal project in Australia – the $8 billion Green Square project, which is developing 20,000 new homes and infrastructure between now and 2030, with the hub being 14 hectares of land to be developed as the Green Square Town Centre – a new major centre around the Green Square railway station.

According to Andrew Donnelly, CEO of Whiterock Residential Projects, which has recently started building boutique development Madison (pictured above) near Dank Street, the urban renewal in Waterloo is just beginning.

Donnelly tells Property Observer the shift in  demographic in Waterloo has been “palpable” over the last few years, with young professionals earning combined incomes of $200,000 plus choosing to live in the suburb.

He says it has shaken its reputation as an industrial, crime-ridden area, with empty-nesters from the suburbs choosing to buy in Waterloo.

“One father told me there are streets in Waterloo they would not walk down 20 years ago, but will now happily let their kids play there,” he says.

“Dank Street is a real destination for high-end eateries, and people from the eastern suburbs come to eat here over the weekend.”

According to Donnelly, there are two distinct markets in the Waterloo area – the high-rise market being targeted by Harry Triguboff’s Meriton Group (Eon Zetland priced from $660,000 for two-bedders) at Asian buyers and the student market and the low-rise boutique projects such as Madison and 141 McEvoy Street.

He says the market is 75% owner-occupier in boutiques projects, while in the high rise, 75% of the apartments are being bought by investors.

“Two-bedroom units are selling for around $700,000 and three beds for over $1 million,” Donnelly says.

Most of the buyers are locals, with overseas investors comprising just 5% to 10% of new residents, according to Donnelly’s estimation.

He says the Madison project – which features 47 one-, two- and three-bedroom apartments – is now almost sold out, with just 10 remaining and prices over $10,000 per square metre.

“That would have been unheard of 10 years ago,” he says.

Whiterock will launch a new project at 141 McEvoy Street in Alexandria, with prices starting from around $450,000 for a one-bedder.

Another major project is Becton’s Divercity project (pictured above and below), which launched in December 2009 and as of March this year had sold 400 apartments, with 122 settling in May and June.

Becton attributes its success to date to proximity to the Sydney CBD and easy access to Sydney Airport, eastern suburb beaches, Centennial Park, Moore Park golf course and the three major universities, UNSW, UTS and Sydney University. It is also just 800 metres from Green Square train station.

The development includes a café and restaurant strip, tepanyaki bar, rooftop cinema and 20 metre heated outdoor pool with cabana lounges and landscaped park grounds.

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The project will be completed in August 2014.