Sydney's seven suburbs to watch guided by rail and millennials: Onthehouse
Even if they are struggling to buy a house, Generation Y may have more of an impact on the property market than they think.
While many presume a link between the proximity of train stations and property values, research firm Onthehouse believes that the positive impact of railway infrastructure on property prices is amplified by the presence of so-called 'millennials'.
According to Onthehouse's research, suburbs with a train station generally recorded capital growth rates above the Sydney region's 10 year average. However, suburbs where the median age of residents was below 37 years – the national average – showed a stronger relationship between train stations and price growth.
In Lidcombe, for example, properties within a kilometre of Lidcombe station are valued 2.1% higher than those more than a kilometre from the station, according to Onthehouse. Eliza Owen, Onthehouse market analyst, noted that the suburb has a median age of 33, and more than 22% of the workforce are professionals.
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"Lidcombe is a great example of how millennials are driving up the change in property values in suburbs that have train stations," Owen said.
Onthehouse has picked seven suburbs to watch, based on upcoming rail construction. By 2019, planned railway developments will connect the north western suburbs to the Chatswood line.
Source: Onthehouse.com.au
According to Owen, the new stations set for the seven suburbs will allow younger residents to access the CBD, and will create thousands of jobs.
"In Kellyville, the building and maintenance of the station, increased dwelling construction and new commercial establishments are expected to create over 3,000 jobs in the area. Whereas in Kingsford, where one third of the residents fall between 20-29 years old, the light rail is expected to be popular with young people and students travelling to the city for entertainment and work outside of study hours," she said.
The house at 28 Ikara Avenue in Kellyville sold for $920,000 earlier this month. The three bedroom house on a 696 square metre plot has polished floorboards throughout and ducted air conditioning. Less than two years ago, in September 2012, the house sold for $580,000, reflecting 58.6% price growth in two years.
In mid July last year, it was advertised to rent at $550 per week. Assuming the rent has remained the same, the house sold at a 3.1% yield.