John McGrath ignites Sydney's "hot forever" inner ring debate

John McGrath ignites Sydney's "hot forever" inner ring debate
John McGrath ignites Sydney's "hot forever" inner ring debate

John McGrath has always been passionate about the property prospects of Sydney's inner ring suburbs.

But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever".

The high profile agent stopped short of declaring inner city property prices were immune from price falls.

But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers. 

"There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said.

McGrath pointed to their proximity to the city, beaches and lifestyle amenities such as art galleries and restaurants.

Interest in the topic was illustrated on the trendolizer trend graph.

"There is sometimes a very minor [price] correction for a small amount of time but generally speaking Sydney is becoming a New York," McGrath suggested.

"It's a big international city and people want to live in it ... and there's very limited stock available. It's always going to be blue-chip and a market leader."

The commentary came with a caveat as McGrath tips price growth in the inner ring will actually lag other suburbs in 2015 because much of it had already "outperformed" other areas in 2013 and 2014.

Bill Randolph, director of the City Futures Research Centre at the University of NSW, warned over-densifying the inner circle will make the suburbs less desirable.

AMP Capital chief economist Shane Oliver the inner ring was affected by "interest rate cycles, recessions, building booms and busts", but felt the impact tended to be far less than the outer suburbs.

Analysis of the past decade by Domain Group's senior economist Andrew Wilson found properties within Sydney's inner 10 kilometre radius had risen 71.5%, compared with 48.4% further out.

From its Paddington origins, McGrath Estate Agents reported December sales figures of $1.02 billion from 1,018 sales for its 62 office network, directly on the back of its 25-year record in November 2014 with $1.27 billion from 1,237 sales. 

McGrath advised that eight offices clocked record sales figures for December.

Sales activity was diverse with 274 sales over $1 million; 65 sales over $2 million and 9 sales over $5 million.

“When we look at the property landscape compared with twelve months ago, property has well and truly rebounded along the Eastern Seaboard, with very strong activity across metropolitan Sydney from Epping in the northwest to Sylvania and Brighton-Le-Sands in the south. The Central Coast is also benefiting from an upsurge in upgraders and investors across all price brackets.

“The strong growth recorded from our Mosman office is in line with our view that the prestige market will perform very well this year off the back of a relatively quiet year in 2014 compared to the rest of the market.”

The top five McGrath offices for growth in the past 12 months were:

  • Brighton-Le-Sands reports $34.6 million (+ 174% on December 2013)
  • Mosman reports $60.3 million (+167% on December 2013)
  • Palm Beach (QLD) reports $11 million (+145% on December 2013)
  • Epping reports $48.4 million (+88% on December 2013)
  • Warners Bay reports $15.2 million (+87% on December 2013)
  • Other offices in the group that posted record sales performances for December were:
  • Sylvania ($25.5 million), Belconnen/Gungahlin in ACT ($23.9 million) and Gosford ($13.6 million).

{mijopolls 85}

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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