Suburb spotlight: Mount Druitt may retain hotspot label

Located out in Sydney’s west is the suburb of Mount Druitt. Serviced by a sizeable train station, a hospital, a Westfield (including an external 24 hour K-Mart, a drive through Starbucks and a number of early payday loan stores and cash converters), schools, a police station and an RTA and well placed between Penrith and Parramatta, it is a confusing blend of amenity and stigma.

Mount Druitt is some 40 to 45 kilometres away from the CBD, and in the Blacktown Local Government Area, it was once one of the poorest suburbs in Sydney. Locals often use the ‘Mount Druitt’ label to refer to smaller suburbs, including Whalan, Bidwill, Blackett and Tregear, with the precise suburb itself having around 16,000 people.

Many investors express concerns about tenanting properties in these areas and, given some of the negative media attention it regularly receives (who can forget the death of Kiesha Abrahams, or the 2770 postcodes' 2012 top-of-the-bankruptcy-list ranking), it's unsurprising if perhaps a little unfair.

Certainly, there's graffiti and signs warning that domestic abuse is not tolerated dotted around the main shopping centre. There can also be a sense of discomfort around the station itself, with youths often lounging around this particular meeting point. However, it would be a hard argument to push that the suburb hasn't improved significantly in recent years, and many investors have success in these areas with good renters. While the area is shifting in demographics, and more suited-up professionals can now be seen waiting for the morning city commuter train than ever before, it may take some time for the stigma to wear off.

It has recently seen its first sale over $1 million – a development opportunity piece of land – and it seems some other properties locally may be creeping closer to this price bracket should demand continue the way it has been since over 2013.

This upwards pressure on prices has been striking. Whalan, for instance, has seen 14.8% growth in the median price of houses over the past year, with RP Data putting the new median at $276,000. Meanwhile, Blackett has seen 12.8% growth, while Tregear has seen 15.5% growth. Bidwill has not changed in value.

These statistics are potentially strong due to both first home buyer, new development and renovation activity (many investors buy worn out older homes in this suburb to cosmetically improve).

Employment statistics

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Source: Australian Bureau of Statistics 2011 and 2006 Census Data

Heading towards the Australian Bureau of Statistics' (ABS) census data, the median weekly income for a household in Mount Druitt sits at $1,099, compared to $1,477 for the state. Couple families with children, at 55%, are most dominant. Within these families, it is most likely that one will be working fulltime, at 25.2%, followed by neither working, at 24.6%, followed by both fulltime at 18.4%.

For those unfamiliar with the stigma of suburbs out west, and particularly those in Mount Druitt and surrounding areas (including Rooty Hill), a Facebook page currently exists with the headline “I Agree, Bear Grylls is Tough But Could He Survive a Night in Mount Druitt?” It has 6,427 likes. A quick look at Urban Dictionary reveals a similar line and a 2010 documentary, The Lives of Mount Druitt Youth, asks "What happens when you walk into an area labelled the worst area in Sydney?”

whether or not it retains this label in 2014 is up for debate, and it is becoming increasingly busy - the inability to park at the Westfield carpark on a weekend in the suburb has become a running joke - with its position near the Lighthorse Interchange (M7/M4) rendering it easily accessible.

A typical property in the suburb as noted by the ABS is a house (48.9%) with three-bedrooms, and likely rented by a family with one car. It’s likely to be either fibro or brick and on a decent sized block of land. For almost 80% of those that are tenants, they will be paying less than 30% of their income on rent.

The NSW government’s Family & Community Services’ Building Stronger Communities strategy has been working for some time on improving the social housing estates across the state, and has flagged Mount Druitt and its small suburbs as an area worthy of attention.

“Mt Druitt is a priority location for this strategy and exciting new improvement plans to revive the social housing areas in Shalvey and Lethbridge Park have been announced,” it currently prioritises.

The suburb is divided informally into ‘old’ and ‘new’ Mount Druitt, with a striking comparison. The train track is largely what divides these two areas apart and, as many who spend time in the suburb will know, so do the prices. In the older section, prices for a five-bedroom family home can be seen up to the $600,000 price point. Meanwhile, in the newer section, the upper limit of house prices is generally $100,000 or more under this price. This may also be to do with the block sizes seen in the newer section.

Investors have swooped in over the past five to 10 years, attracted by the low prices, rental yields and the ability to attach a granny flat to many house blocks to boost this rental income even higher - often into the 9% range, figures usually unheard of around Sydney. Units near the train station have been in particularly high demand from investors, and the suburbs have seen much media attention as 'hotspots' with headlining stories from investment titles, and mainstream media, for two years saying the area has recently emerged as the next place to buy. Mum and dad investors also aren't necessarily going it alone - buyer's agents such as Right Property Group, B Invested and similar have bought in these areas regularly over the past half a decade.

New developments, currently with asking prices of over $330,000 for two-bedroom units, and advertising themselves to first home buyers, attest to the increasing popularity of the area. Residex puts the median house price at $427,000, and the median unit price at $267,000. Properties on the outskirts of the suburb tend to be more expensive, while those down busy arterial roads, such as Luxford Road, tend to be significantly cheaper.

Heading onto the rental listings, it's incredible to see rents in the $300 to $400 range for two bedroom units, where a couple of years ago a reasonably sized rental could be snapped up for around $250. The most expensive rental currently listed is a $500 a week four-bedroom house, with the cheapest being $240 for a studio.

Most expensive rental ($500 per week)  16 Tulloona Street

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This four-bedroom home (pictured above)  is unusual for the area, with built-ins in every room, two bathrooms, a garage and the master bedroom having an ensuite and balcony. It has ducted air conditioning, a spa bath in the bathroom, an internal laundry and sizeable rooms. It has had 141 page visits, but has been listed for four days this year.

Cheapest rental ($240 per week) 40/254 Beames Avenue

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There have been 4,978 views on this property (pictured above), according to the listings site, and RP Data notes that it has been listed since mid-January. It has a registered car space and recently had its open for inspection. It also has a balcony, and what appears to be fairly modern fittings for the kitchen and bathroom. It's "near new" and located close to the train station, noting that no pets are allowed.

With a tight vacancy rate, put at 1.1% by SQM Research, it's likely rents in the suburb may increase even further, despite more supply being injected into the area.

jduke@propertyobserver.com.au

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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