One suburb punching above its weight compared to other Sydney hotspots
One Sydney suburb synonymous with famed boxer Jeff Fenech is outperforming all others in Sydney, but a string of other suburbs are also outpacing the market and attracting investor interest.
A decade of transformation in the inner western Sydney suburb of Marrickville has paid off after research found it has the highest annual dwelling value growth of all suburbs.
Like boxing legend Jeff ‘The Marrickville Mauler’ Fenech, the suburb punches well above its weight and refuses to hit the canvas.
The once rough and ready suburb known for its hard, grimy edge, has now seen an influx of young professionals, artists and musicians give it a more bohemian atmosphere.
CoreLogic’s September Home Value Index doesn’t mention the Bob Hawke Leisure Centre, which is typical of warehouse conversion projects in the suburb, where more than eight micro-breweries have created entertainment precincts and stirring dwelling value growth of 8.9 per cent, ahead of its nearest rival, highly regarded northern Sydney’s Ku-Ring-Ai, by 2.1 per cent.
Neighbouring areas, Petersham, and Sydenham, have piggy-backed with Marrickville in the top spot and are surpassed in growth nationally by only two suburbs in Adelaide (Playford, Gawler-Two Wells) and five in Perth (Mandurah, Armadale, Rockingham, Gosnells, Kwinana).
Aris Dendrinos, Senior Sales Consultant, Richardson and Wrench, told API Magazine that of the three suburbs it’s Marrickville that is the standout performer, highlighting a three-bedroom, one bath property on Renwick Street that sold in July for $2.1 million, well above the median dwelling price of $1.7 million.
“It sold purely because of the land and the opportunity the land afforded and the street it’s in, and it’s in Marrickville so I have no doubt if that was in a neighbouring suburb, it would have been a much harder sell because there’s just an aura around Marrickville right now, and I don’t see that aura going away,” he said.
“Marrickville’s achieved rockstar status in my opinion; it can't do anything wrong, the groupies will just agree with it no matter what it does, clearly separating it from Petersham and Sydenham.
“Gelato Messina, for example, made a decision to open up their ice cream headquarters in Marrickville, and that’s not a fluke, they didn't just happen to find the right property in Marrickville.
“I reckon they made a strategic decision to base it in this suburb, so as a brand, Marrickville is at its peak for recognition, acceptance, attraction, knowledge, the whole shebang,” Mr Dendrinos said.
“I don't see that stopping, it’s a bit of a juggernaut process, kind of akin to Newtown 30 years ago or Paddington or Balmain, which metamorphosised from a grubby box kind of area and now it’s the bees’ knees; that’s what’s happened to Marrickville and it’s not going to stop.”
The Sydney suburbs outpacing market
Sydney, along with Brisbane, is leading the property price race in Australia at the moment but not all suburbs are enjoying such a high.
Anna Porter, Director, Suburbanite, says there’s evidence Sydney has started to recover from the 2022-2023 declines that saw a downward spiral in housing values across the capital.
“The latest data shows a modest recovery and on the ground we are seeing this being driven by a lack of housing supply or listings and the traditional spring boost in housing stock has not been as strong as expected,” Ms Porter said.
This correlates with CoreLogic’s September data that indicates Sydney’s dwelling values improved in the past 12 months by 1.2 per cent, and the last three months by 3.8.
Theo Chambers, CEO, Shore Financial warns it’s too early to know for sure what Sydney’s rising markets are reflecting, as indicated by the latest Shore Financial State of Sydney Report.
“Though we can say with certainty Sydney is in growth mode as we’ve seen days on market and inventory levels fall in many parts of the city and market conditions have swung from buyers to sellers, which has been reflected in rising asking prices, it’s important not to get carried away, because there’s a difference between a rising market, which we’re in, and a booming market, which we’re definitely not in.
“While prices are rising across Sydney as a whole, they’re not rising in every single suburb,” Mr Chambers said.
Wealthier suburbs like Naremburn on the North Shore and Fairlight on the Northern Beaches, are forecast by Shore to record stronger growth over the next half-year by 9 and 6 per cent, with median prices of $2.9 million and $3.7 million, respectively; compared to less affluent suburbs like Busby and Green Valley in the city’s west forecast at 1 per cent house price growth over the next six months.
“Focusing just on the 25 suburbs in the report, they’re all showing strong signs they’ll outperform suburbs in a similar price bracket over the next half-year, and one of the key leading indicators is the low levels of inventory in these suburbs, so, demand pressures are building, which is likely to lead to above-average price growth,” Mr Chambers said.
Price pressures from low stock
The six-month trend in sales volumes is stabilising.
Volumes in the twelve months to August 2023 were down by 16.6 per cent, while days on the market are down to 29 from 36 days a year ago and dwelling values are 6.2 below the record high set in January 2022.
Mr Chambers identifies lack of supply as the single biggest issue facing Sydney and cites implications of planning and policy changes that could result in select pockets of supply increasing in the coming years.
“In the short to medium term, however, demand is more than keeping up with supply and buyers are enjoying the benefits of a marginal increase in listings from this time three months ago, with the average suburb increasing by an extra two properties on average but this increase in listings is unlikely to have much impact in terms of increases in inventory.
“Demand should more than keep up with this modest increase in supply across the vast majority of suburbs, especially as we’re now in the spring market where activity starts to warm up.”
Ms Porter says prices are expected to stabilise and not trend backwards, however, growth in values will remain minimal.
“As borrowing capacity is limited for many buyers now with the higher rates assessments dampening people’s ability to service large debts, this will keep many buyers on the sidelines and not able to get into Sydney’s expensive real estate market,” Ms Porter said.
In Marrickville, Mr Dendrinos suggests good schools and the transformation from old factories to attractive entertainment precincts and lifestyle choices, are good reasons for potential sellers to stay put.
“Divorce, death, and financial difficulty have become the main ‘can't-change, can't-avoid’ reasons for listings coming on in Marrickville, but the choice listings, as in ‘I have a choice to list this property’ has dwindled dramatically,” Mr Dendrinos said.