What $700,000 can buy in Inner Sydney: HTW residential
Within the inner suburbs of Sydney, buyers with a budget of $700,000 or less are limited to studio, one- or two-bedroom apartments, according to the latest Herron Todd White (HTW) residential report.
The valuation firm took a look at how a budget of $700,000 could be invested in property markets across the nation.
However there is still a wide range of factors to consider such as location, size and quality of development, living area size, aspect and natural light, parking and many other fundamental aspects such as nearby infrastructure and potential oversupply issues within the immediate area, the HTW noted.
"If considering buying within this market segment, it is generally important to purchase something to which you can add value by doing minor renovations and buy within smaller scale, good quality buildings that have some character and are located in convenient positions where people want to live, close to public transport, schools, parks, local shops and cafés, etc," the valuation firm said.
6/1 Darley Street, Darlinghurst (pictured below) was advertised for sale throughout April and May with an asking price range of $550,000 to $580,000, and sold for $513,000 on 29 May 2020.
Interestingly, the previous sale was five years ago in July 2015 for the same price of $513,000 when it sold prior to auction, the report noted.
This is a small, one-bedroom apartment with an approximate living area of 37 square metres and no outdoor areas or parking.
This style of property is aimed at investors, or to a lesser extent, first home buyers.
The rental market has been negatively impacted due to COVID-19 which directly affects how much investors are willing to pay for investment properties of this nature.
Furthermore, the rental history for this property as per RP Data indicates that the asking rent during 2010 was $425 per week and the recent asking rent as at March 2020 was $495 per week, however this appears to have now reduced to approximately $400 per week.
This is a good example of an entry-level property below $700,000 within a popular inner-east location and approximately two kilometres of the Sydney CBD, the report noted.
This property also benefits from heritage character and could prove to be a good purchase for a first home buyer, or a steady longer- term investment, provided of course that you could cope with the reduced rental income in the current market.
The report noted other matters to consider for this type of property are some lending policies on properties with a living area of less than 50 square metres requiring a larger deposit.
8/73 Warren Road, Marrickville (pictured below) is another example of an entry-level property in the inner west region of Sydney, the report noted.
It is located approximately 9 kilometres from the CBD and sold for $655,000 on 13 June 2020.
This is a two-bedroom, one-bathroom apartment situated within a two-level walk-up building constructed circa 1970.
The unit benefits from updated interiors and a single car space.
The property is positioned in a quiet street and located approximately 500 metres from Marrickville train station and local shops.
Similar two-bedroom units can achieve a rental income of approximately $450 to $500 per week.
In the east, you are generally looking at studio or one-bedroom units with car accommodation at this price point, which is entry level for first home buyers or local investors, the report noted.
Slightly further away in the inner south, suburbs such as Botany, Mascot, Rosebery, Zetland and Waterloo, which typically have a large supply of modern units, provide more options for those looking to buy in the area.
"In the current market, investors should look away from over supplied areas and large unit developments and instead focus on older style walk-up units requiring renovation to add value.
"The oversupplied areas will always be more volatile due to large supply and many similar style developments. The properties likely to perform the best are those that are unique, with views or proximity to the beach or harbour, or those that can offer value add through renovations," the valuation firm said.
