Inner west Sydney detached hard to come by, but best prospect for growth: Herron Todd White

Jonathan ChancellorJune 5, 2013

Valuers Herron Todd White have suggested the forecast for the next four to six years across metropolitan Sydney was overall positive.

However the firm does not expect to see the very high levels of capital growth witnessed over past years.

"Due to the different markets we see throughout the city, we could write a novel on different price points and sectors that offer good growth options." 

Sydney’s inner west is expected to have "continued strong growth" over the next four to six years, the group forecasts.

"The average buyer looking for a detached dwelling in these suburbs may find themselves among some stiff competition.

"Detached dwellings achieve very good prices as they are scarce and sought after," the report said noting large variations in detached dwellings sitting on between 100 square metres to 1,000 square metres of land.

"If we specify a typical inner west suburb such as Leichhardt, a detached dwelling, on an average block size of 250 square metres, the average buyer would be spending around the $1 million mark."

For inner west units, HTW suggests the average buyer would be looking around the $600,000 mark for a 1970s, two-bedroom unit with a single carspace.

"At this price point though, we would expect good growth over the coming years as these properties become more in demand.

"Market sentiment remains very positive in this sector with properties often selling before going to auction and above the advertised asking price.

"Currently there is a lack of stock in the inner west which, with continued high demand, is helping drive these prices even higher," it noted adding that investors are very much active in the unit market at this price point due to attractive yields and extremely low vacancy rates.

The report concludes that overall, the Sydney metropolitan area is expected to see "steady capital growth" over the next four to six years.

"There are numerous suburbs that are talked about as the next area to take off; however any area with good infrastructure and proximity to services is bound to be a good performer.

"The average buyer needs to be prepared for stiff competition as low interest rates and current lack of stock in the general market will continue to put supply/ demand pressure on prices," it said.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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