Suburb spotlight: Rushcutters Bay sees strong unit price growth
Sitting on Sydney Harbour, Rushcutters Bay was home to the sailing events in the 2000 Sydney Olympics. Located 3km from the Sydney CBD, it was previously referred to as “Rush Cutting Bay” in the 1800s because the swampy land was covered in tall rushes used by early settlers for thatching houses.
Fast-forward 200 years and Rushcutters Bay has been transformed into a prime waterfront site. According to the latest RP Data report, unit prices in the area have increased by 27.6% on last year, while rental yield currently stands at 5.6%.
Australian Property Monitors senior economist Dr Andrew Wilson told Property Observer that there are “continuing levels of demand” for the unit market in Rushcutters Bay, and “demand levels will continue in the area”.
“I believe there will be price growth again next year of around 5%. There’s a strong unit market there,” he said.
James Peach of Bresic Whitney Real Estate told Property Observer Rushcutters Bay is currently seeing a “big jump in buyers” especially for properties along Bayswater Road.
“Properties in the $500,000 range, and the studio and one-bedroom range, we’ve been seeing an increase in numbers and an increase in sale prices,” he said.
He noted that buyers were starting to move away from nearby suburbs such as Potts Point and Elizabeth Bay, and have been turning to properties in Rushcutters Bay.
“With prices going so high in Potts Point and Elizabeth Bay, people are starting to look at the surrounding suburbs. There’s a lot of older people here, it’s one of the older suburbs, so it’s not really young and trendy,” he said.
However that is changing with the new Advanx East development that has brought an additional 132 units and a younger demographic to the area.
“Lots of restaurants have come in, and it’s brought a lot more people to the area,” Peach said.
Peach has also noticed a jump in demand for art deco properties in Rushcutters Bay.
“A year ago, numbers were quieter. But it’s been much hotter in the last six to nine months,” he said.
He believes Rushcutters Bay will continue to grow in popularity, citing growth in Potts Point and Elizabeth Bay as examples.
“What we’re seeing in Rushcutters Bay now is more of a price correction; prices will go even higher, I think,” he said.
Richardson & Wrench Elizabeth Bay/Potts Point property manager Leanna Levitt told Property Observer Rushcutters Bay is “doing very well”.
She agrees that the Advanx East development has added a lot of apartment space to the area. As a result, there is a growing number of restaurants and cafes.
“It’s becoming like a small village,” she said.
She noted that the Advanx East property has likely influenced the median unit price in Rushcutters Bay.
“Generally with new developments, prices will go up, and that will be reflected in the next 12-18 months as properties are sold and resold,” she said.
Levitt has also noticed that tenants are considering purchasing their own properties as a result of the current low interest rates.
“With interest rates so low, renters are asking if they should be paying someone else’s mortgage. We can’t increase rent by 25 to 30% now, unlike two and a half or three years ago. It’s quite an interesting time,” she said.
“Vacancy rates are quite low at the moment, though I think it’s more on the supply side than the demand side,” she added.
She expects that the property market in Rushcutters Bay will continue to do “very well”, as with suburbs within a five-kilometre range from the Sydney CBD.
According to the latest RP Data report, the median unit price is $472,000, up 27.6% on last year as mentioned earlier. The average discount required to sell a unit is 7.6%, while private treaty sales average 54 days on market.
The median asking rent for units in Rushcutters Bay is $510 per week, while gross rental yield currently stands at 5.6%.