For approximately 30 months now, Ark Total Wealth has focussed it’s property research gaze on the Inner West area of Sydney and generated some excellent returns for clients in the process. The greater Sydney area as a whole whilst generally having higher prices than other capital cities, is blessed with high natural rental yields of 5.0% +, low vacancy rates, and a chronic undersupply in new dwelling completions. ANZ Economics notes that dwelling completions for Sydney are currently running at about 26,000 (about half the amount of a decade ago) and well below current requirements. They also report a serious disparity with dwelling starts, estimated for 2011 at 130,000, down from the 149,000 of 2010, and well shy of the estimated 180,000 required to fill current demand.
The practical outcome of such numbers are continuing upwards pressure on rents and by virtue of this also capital values, with ANZ predicting rents will rise by “close to double digits”.
Drilling down further, since 2008 the inner west as a region has been a consistent out-perfomer in the Sydney property market, as purchasers take advantage of it’s close proximity to the CBD, access to rail and bus transport, a rapid gentrification and urbanisation of many inner west suburbs, and more affordable prices relative to the already highly priced blue ribbon areas of the East and North Shore.
For calendar 2010 auction clearance rates for Inner West suburbs such as Marrickville averaged 82% across houses and units (85% for units alone), compared to an average of 65% for Sydney as a whole. Tenant demand is also very high, with vacancy rates for Marrickville currently sitting at 0.9% of all available dwellings. Keeping in mind 2% vacancy constitutes an acute shortage, and 3% is equilibrium, the high demand relative to supply has pushed up rents, and accordingly changed the demographics and aided the gentrification of the area from traditionally blue-collar working class to white-collar young professional families.
This can be seen in the growth rate of school enrolments in the suburb that have risen as much as 50% in the past 5 years, and falling crime statistics; Marrickville now having a lower home break-in rate per captia than Woollahra in Sydney’s east, or North Sydney according to the NSW Bureau of Crime Statistics and Research.
Property research houses and even the wider media have also earmarked the Marrickville area and surrounds as one of Sydney’s top future property prospects.
In 4 quarter 2010, Australian Property Monitors predicted that units would achieve a higher rate of capital growth than houses over the coming year as investors and a limited number of first-home buyers look for affordable properties. They went on to list their top 10 suburbs in terms of capital growth prospects with Summer Hill, Hurlstone Park, Petersham and Dulwich Hill all getting a mention.
Interestingly, all 4 of these suburbs adjoin each other, with 3 of them adjoining directly onto the suburb of Marrickville itself.
APM list 4 of their top 10 capital growth prospect picks for Sydney (in red)
Similarly, a March 2010 article by Property Editor Josephine Tovey in the Sydney Morning Herald titled “ Bars open, property up: arise the ‘new Paddington’ “, declared;
“If the property prices didn’t give it away, the impending arrival of the first small bar would have: gentrification is engulfing Marrickville.”
Last month property analysts, predicting a doubling of returns in the next six years, declared the multicultural enclave of the inner west was ”the new Paddington”, provoking a mix of delight and unease, but little surprise.”
With a wealth of statistics and external opinions pointing towards the Inner West and Marrickville LGA as being one of Sydney’s potential top performing property markets, further detailed analysis on development particulars help identify value for money and help establish an understanding of how, why and what sort of capital growth is being achieved.
Charting growth of ATW Property in the Inner West
Since late 2008 Ark Total Wealth have strategically recommended a select offering of developments in the Inner West region to their clients, based on the type of forward looking research and statistics detailed above, and also on careful analysis of the projects at hand. Now more than 2 years down the track, our clients have begun to reap impressive results from these acquisitions, and we see The Quarry at Marrickville as a continuation of this story..
Camperdown – Trio Apartments – 1 bed, 1 bath, 1 car
Exchanged: December 2008, Completed: July 2009
Purchase Price: $470,000
Current Valuation: $570,000 (based on sales evidence)
Current Rental: $560 pw
Balmain – Boutique Apartments – 1 bed, 1 bath, 1 car
Exchanged: April 2009, Completed: September 2010
Purchase Price: $550,000
Current Valuation: $612,000 (based on sales evidence)
Current Rental: $550 pw
Petersham – The Majestic Theatre Apartments – 1 bed, 1 bath, 1 car
Exchanged: September 2010, Completed: Estimated 2012
Purchase Price: $473,000
Current Valuation: $501,300 (based on sales evidence)
Estimated Rental: $470 pw
An interesting statistic to note is the internal price per square meter for 1 bedroom apartments (psm) of the above three projects which at time of purchase were:
Camperdown: $8,245 psm
Balmain: $10,000 psm
Petersham: $9,260 psm
Marrickville: $7,258 psm (1 bedroom) AVAILABLE $6,704 psm (2 bedroom) AVAILABLE
We therefore believe that given the strong inner west story and the considerable growth achieved thus far, coupled with comparatively similar value for money on an internal pricing basis, The Marrickville apartments represent good for value for money in what is an area that is trending towards strong future capital growth.
The Apartments – Marrickville
Situated just 200m from the Cooks River and neighboring parklands, close to all the conveniences and lifestyle this location has to offer, this ultra modern development will offer spacious, one, two , three and four bedroom apartments.
From the high quality construction and architect-designed exterior to the beautifully appoint finishes within (including stainless steel European appliances), every space has been carefully crafted to suit a cosmopolitan lifestyle.
Built across 4 buildings ranging from 4 to 5 levels in height, all open plan apartments maximise the functionality of the generous sized floor area, with many apartments expanding over two levels. Positioned as a centerpiece for the Marrickville apartments lays a large shared landscaped courtyard and entertaining area providing residents with a private hide-away.
Construction:
Commencement Date :-
Completion Date:- March 2013
Apartment Layout : 1 and 2 bedroom, 1 & 2 bathroom
Size range:
Internal 45 sqm to 88 sqm | External 7sqm to 20sqm
Outgoings:
Body Corporate: approx $500 – $1,000 qtr
Council rates: approx $450 qtr
Car park: 1 car park per unit
Price: $450,000 to $599,000 (No stamp duty if exchanged before construction commences)
Rental Estimate: $450 to $600 per week
Amenities & Environment
Marrickville West Public School 550m
Ferncourt Public School 600m
Tempe High School 1.4km
Marrickville High School 1.7km
TAFE NSW 3.0km
University of Sydney 5.0km
Woolworths Supermarket 500m
Marrickville Metro 2.7km
Marrickville Railway Station 900m
M5 East Freeway 4.0km
Steel Park and Café 100m
Cooks River 300m
Marrickville Strip Shopping 1.6km
Sydney Airport 2.5km
Sydney Private Hospital 3.5km
FLOORPLAN
