This excellent article written by Tony Johnston – Deputy Domain Editor (News) is a terrific article which demonstrates the location vs size dilemma.
A million dollars doesn’t cover a lot of ground if you are buying a house in Sydney. Based on land value, it would get you an eighth of a house in Point Piper, a double garage in Vaucluse, the lower floor of a grand Paddington terrace and a super small semi in Mosman.
A city that once embraced the quarter-acre dream is fast becoming the home of the million-dollar shoebox.
Paddington, Surry Hills and Darlinghurst are now some of the priciest slices of Sydney.
An analysis of 2013 sales data reveals just how many square metres you get for $1 million in Sydney’s million-dollar suburbs.
It shows that for many buyers, ‘‘bang for your buck’’ is no longer defined by land size.
Research by Australian Property Monitors and Domain indicates that buyers are paying a premium for proximity, even if it means they end up in tiny houses.
Paddington, Darlinghurst and Surry Hills are now some of the priciest slices of Sydney for price per square metre, just behind the preferred postcode of the mega-rich, Point Piper.
‘‘There are clearly other factors at play other than how much dirt you are buying,’’ APM’s senior economist, Dr Andrew Wilson, said.
‘‘The growing desire to live in a cosmopolitan environment means that land values come at a premium, that is why we see inner-city suburbs with land values similar to areas where properties sell for stratospheric amounts.’’
The Sydney University economist and housing authority Stephen Whelan said while land values typically move in concentric circles away from the centre, certain factors had underpinned the gentrification and rapid price growth of some inner-city enclaves.
‘‘There is certainly no doubt that the issue of transport would be an important determinant of the price of these suburbs,’’ he said.
‘‘As [we] become more time-poor, people who are working longer want to spend less time travelling, which places a higher premium on short commute times.’’
Demand for inner-city suburbs increasingly include well-to-do families.
‘In general families are smaller than they use to be . . .that has provided opportunities for people who might have shied away from smaller blocks in inner-city areas in the past,’’ said Dr Whelan.
‘‘It is not uncommon now for properties to sell for $20,000-$25,000 per square metre,’’
‘‘But the renovation costs are very expensive to get them to that level.’’
Sydney’s top 10 most expensive suburbs by median price per square metre paint a picture of prestige and proximity.
The $52 million sale of the mansion Altona, though not yet officially recorded by APM, dragged the suburb to the number spot – $1 million would now get you 79.8 square metres on the prestigious outcrop. But given the suburb’s median land size last year (739 square metres) you would be lucky to secure a boatshed for that price.
Also in the top 10 are Lavender Bay and Kirribilli on the lower north shore as well as Woollahra, Darling Point, Watsons Bay and Edgecliff in the east.
At the tailend of the top 20 you have Forest Lodge and Glebe where buyers with $1 million would get about 140 square metres – the size of some of the smaller workers’ cottages in the area.
In some of Sydney’s old-money markets like the upper north shore $1 million still goes relatively far – in North Turramurra $1 million would get you just shy of 1000 square metres.
In St Ives Chase, West Pymble and North Wahroonga $1 million translates to more than 900 square metres of land.
For more insights into buying property in the Sydney market check out Janet’s Tips and Tricks for Negotiating a sale.