Pyrmont has transitioned into suburb of choice: Savills
Sydney’s inner suburb of Pyrmont has transitioned into a stylish suburb from a habourside industrial hub, and it will only expected to benefit from the growing population, says Savills.
Pyrmont’s transformation over the last few decades is interesting. As industry moved out, the area declined and by 1991 had just 530 residential dwellings. However, several government initiatives later, redevelopment has picked up.
The number of residential dwellings has increased by a multiple of 12 and Pyrmont is now one of the densest suburbs in Australia, say Savills in their latest residential spotlight, authored by Sophie Chick.
However, the rate of development has slowed over the past decade with residential stock in the suburb increasing by just 9.1 percent over the decade to 2016.
The redevelopment of the current site of the Sydney Fish Market, which is earmarked for residential development, is expected to change the site into a prestigious residential destination.
The median price for an apartment in Pyrmont is $1.05 million, slightly higher than the neighbouring suburbs of Sydney, Glebe and Ultimo but lower than those in Rozelle and Balmain.
By contrast, the median house price at $1.57 million is lower than all neighbouring suburbs with the exception of Ultimo due to the nature and size of stock selling.
Property prices in Pyrmont have experienced strong growth over the past decade. The median value of houses has nearly doubled over that period while the median apartment price has increased by 120 percent. More recently, the rate of growth has slowed with median values rising by 7.5 percent and 7.1 percent over the year to June 2017 for apartments and houses respectively.
The median weekly rental value in the area in June 2017 was $840 for a house and $810 for an apartment, equating to average yields of 2.8 percent and 4.0 percent respectively, notes Savills.
The proportion of private renters in Pyrmont is significantly higher than average accounting for 48 percent of the population compared to 28 percent across Sydney. Due to this high demand and lack of new supply in the area, the vacancy rate has remained consistently low over the past couple of years. In June 2017, the residential vacancy rate stood at 1.2 percent compared to an average of 2.1 percent across Greater Sydney.
Pyrmont is popular with young professionals. The largest household types are couples without children and lone persons, which account for 57 percent of the population compared to 43 percent across Great Sydney.
Correspondingly, there is a significantly higher proportion of the population aged between 25 and 34. Employment opportunities are a key reason people are drawn to live an area. Pyrmont is just a short walk away from the CBD, driving demand in the area from white-collared workers.
The largest employment industries for people living in area are the Professional, Scientific and Tech sector and the Financial and Insurance sector accounting for 18 percent and 15 percent of employees respectively, significantly higher than the Sydney average.
Pyrmont has a multicultural community with 51 percent of residents born overseas compared to 37 percent across Greater Sydney. Chinese dominate Pyrmont, accounting for seven percent of residents, followed by the United Kingdom and South Korea with six percent and four percent of residents respectively. As such, many international buyers are attracted to the area, providing an important source of demand for the housing market as both owner-occupiers and investors.
As Sydney’s population continues to increase, interest rates remain low and infrastructure projects near completion, the long-term prospect for Pyrmont remain sound, according to Savills.
Additionally, the transformation of the Bays Precinct is expected to improve the quality of life for existing residents and attract new buyers to the area in spite of the challenges of affordability and a slowing of the property market in Sydney.
