What real estate does $1 million buy in Sydney?
Property prices in Sydney have taken a bit of a tumble from their heady heights, so what can a lazy million dollars buy you in the Harbour City these days?
Forty-four square metres.
Quirky website themeasureofthings.com says it’s roughly equivalent to 11 king size beds, 40 times as big as your average bath towel, or one-one hundredth the size of Bill Gates’ home.
Forty-four square metres is also the luxury residential property space $1 million can buy you today in central Sydney, putting the NSW capital neck and neck with Paris ($1 million for 43sq m) and making prime properties in the Sydney market significantly more affordable than other locations around the world.
The newly released Knight Frank Wealth Report 2023 positions Sydney’s recent 99 sales of ultra-prime residential properties (US$10 million+) above Paris (23) and Geneva (69).
The market does offer diverse opportunities and properties in the $1 million bracket, Knight Frank Head of Residential Erin van Tuil told Australian Property Investor Magazine.
“To purchase a property as close as possible to the city, it would be best to shop around in the Inner West where it’s a short bus ride into the CBD but also with trendy amenities on your doorstep,” Ms van Tuil said.
“Over the past year, houses in Newtown have taken on average just 37 days to sell and have seen a price correction of only 4.9 per cent in 2022.
“Houses are tightly held in the suburb as it attracts a relatively good yield return of 2.45 per cent and it’s one of the first suburbs many interstate renters consider when migrating to Sydney.
“There are also fantastic opportunities to refurbish many standalone and terrace homes to their former glory.”
CoreLogic’s latest Home Value Index shows Sydney’s property prices rose 0.3 per cent in February, parking the city’s median dwelling value at $1,006,923.
It lists the top six Greater Sydney suburbs hovering between $800,00 and $1 million as Fairfield ($909,000), Wollondilly ($966,347), Camden ($950,895) Bringelly-Green Valley ($984,845) and Blacktown ($831,845).
Bexley is another suburb Ms van Tuil suggests is often overlooked, where the median value saw a compression of 4.3 per cent last year.
“The suburb is within good proximity to the airport but still enjoys leafy tree-lined streets dotted throughout with prestige homes and is well-serviced by transport links, which is incredibly important in Sydney today.”
“Rents in Bexley grew by 13.5 per cent in 2022 and this type of growth is likely to continue in 2023 given the declining number of new homes being built in the area,” Ms van Tuil said.
“Throughout the pandemic, many of our clients reconsidered their lifestyle and as a result, purchased a country or coastal home.
“In most instances they still work and carry out their business in the CBD for part of the week, so we’ve seen an incredible uptick in those seeking a city bolthole within walking distance to the office,” Ms van Tuil said.
“For $1 million, there are still established apartment opportunities in the Sydney CBD, and many come with upside for future refurbishment.
“Due to restrictions, there are only a limited number of new homes that can be built in the Sydney CBD, so there is strong appetite from savvy investors, and accordingly the median value apartments in Australia’s financial hub only fell by 2.1 per cent in 2022.
“Killara on the Upper North Shore of Sydney has held its apartment median value steady over the past twelve months and with the tight rental market that has grown at 9.4 per cent and delivers a yield of 3.17 per cent, values are expected to remain firm in 2023.
“This solid performance is not surprising given the suburb’s proximity to the employment hubs of North Sydney, Macquarie Park and Belrose while still being only a handful of train stations from the Sydney CBD.
“The attraction in the suburb for apartments is unlikely to fade over the coming year, with Macquarie University and Lane Cove National Parks close by,” Ms van Tuil said.
Western Sydney houses scarce at $1 million mark
Parramatta-based Guardian Property Specialists (GPS) property mentor Roy Raed Halabi says Western Sydney is “touch and go” at the $1-million-dollar mark.
"Units are typically around the $500,000 to $600,000 mark for modern two bedrooms with decent facilities and good locations, close to amenities.
“Around $1 million dollars, houses are either land value with homes that require extensive renovations or already renovated or newly built homes that would be in excess of $1.5 million,” Mr Halabi told API Magazine.
He cited an example of a home sold at land value in Silverwater for $1.25 million, which allows for a new home or warehouse to be built on the land.
The lot is 446sq metre with an option to lease the existing home while waiting for pending zoning changes and council approval to construct a warehouse on the block.
At the upper end of the spectrum, a new, architect designed, five-bedroom plus two-bedroom attached granny flat with solar, CCTV, alarm system, smart entry front door, double lock up garage, ducted air conditioning and multiple multipurpose rooms, is selling for $1.9 million in Bossley Park.
“The typical home for $1 million dollars is forever changing,” Mr Halabi said.
“They vary depending on suburbs and streets within Western Sydney, while potential zoning changes is another huge contributor to these variances.
“Homes in new estates are easily achieving above $1 million purely due to increased land per square meter rate and building costs.”