City Beat September 2024: Sydney unit growth continues to outpace houses
Unit growth in Australia's most expensive capital continued to dominate over the house market as
The value of units, which incorporates apartments and townhouses, grew by 0.5 per cent over August, CoreLogic's Monthly Index found, compared to 0.3 per cent of houses.
The general trend across capital cities is the strength in the unit market, with every capital city unit market outperforming its house counterpart in August.
"The ongoing outperformance of ‘cheaper’ markets reiterates a strain on demand," CoreLogic's Head of Resarch, Tim Lawless, noted.
"The lower quartile of the combined capital city market, which makes up the most affordable 25 per cent of dwellings, rose 2.7 per cent in the three months to August, compared to a 0.3 per cent lift across the upper quartile.
"In a similar demonstration of demand being deflected towards lower price points, the quarterly change in unit values was higher than houses in five of the eight capital cities."
Sydney was not one of the cities however that had stronger rolling quarterly unit growth. Unit values have risen 0.7 per cent over the last three months, compared to 0.8 per cent for houses.
Sydney's median house value remains the highest in the country at $1.4 million, while the median unit value reached $859,000.
What happened in Sydney’s off the plan apartment market in August?
There was considerable strength in the more affordable end of the off the plan apartment market in August, although sales continued to flow at the top end too.
CBRE took 40 deposits on the opening launch of Melrose Central, the joint venture between Deicorp and PAYCE and the heart of the Melrose Park urban renewal project. The following week they took over 10 more reservations.
CBRE Residential Project Managing Director, David Milton, says Melrose Central represents great value for buyers.
"Our two-bedroom, two-bathroom apartments are priced under $1 million. If you go to any of the neighbouring suburbs, you can't get that kind of value," Milton suggests.
Milton says the buyer pool has been diverse, with first home buyers, local owner-occupiers, and even investors purchasing.
Melrose Central will comprise around 500 apartments above 30,000 sqm of retail and commercial space.
Deicorp had similar success at their debut Rhodes apartment development, Marquet & Mary.
They secured a record two-bedroom apartment sale for Rhodes, with an 87 sqm apartment on the 30-th level of the 32-level tower selling for $1.72 million.
The price was driven both by the track record that Deicorp is bringing to Rhodes, and the sweeping views the apartment will offer.
Interest in the project has been high since the unveiling of its display suite at suite 803/5 Rider Boulevard, Rhodes, less than 300 metres from the site of the development at 1-9 Marquet Street.
Marquet & Mary offers a total of 212 apartments in a building designed by popular architect Fender Katsalidis who were appointed after winning a design excellence competition last year.
Aqualand landed a record week of sales at its recently completed AURA by Aqualand development in North Sydney.
The $40 million in sales was a North Shore record.
The luxury Walker Street building, less than 200 metres from the Victoria Cross Metro Station, was officially completed in late June, with buyers steadily moving into the Woods Bagot-designed building.
Aqualand expects to break the record again in the coming weeks as sales momentum continues to ramp up. They saw over $100 million in sales in February 2024, the most in a single month since the North Sydney tower was launched in December 2021.
TWT Property Group brought some new supply to the market in August, releasing the first stage of apartments in its 1.3-hectare Crows Nest masterplan, The Collective.
The first stage will introduce 93 one, two, three and four-bedroom apartments on the cusp of Crows Nest Village, a short walk from Crows Nest Metro which will no doubt draw buyers who want easy access to the city.
The first stage of the master plan will feature 3,000 sqm of commercial space, part of the 10,000 sqm of commercial space that will be on offer across the suburb-shaping development.
TWT has already appointed Westbourne Constructions to build the first stage of The Collective. Construction is scheduled to commence in the third quarter of 2024.
There was new supply in Castle Hill, where there hadn't been a new development launched in the indemand suburb for around 18 months.
Larool Crescent, named after its location on the fringe of the rejuvenated Castle Towers shopping centre, comprises 110 apartments and townhouses across four, filve-level low-rise buildings, a building type not commonly found in new projects in the area.
The buildings have been designed by PTW to wrap around a central courtyard with extensive landscaping.
There will be one, two, three and four-bedroom apartments on offer, as well as a handful of large townhouses.
Boston Buckler Principal, Alex Walker, said the residences are "tailor-made for owner-occupiers," with designs catering to first home buyers, downsizers, and young families.
Elsewhere across Sydney, builder developer ALAND officially opened its new Parramatta building, Paramount on Parkes, while also topping out Archibald by ALAND in Gosford.
Paramount on Parkes comprises 331 apartments in a 46-level tower, alongside 3,000 sqm of commercial space.
The development was praised for its contribution to meeting Parramatta’s growing housing demands, with local officials highlighting its importance to the city’s future growth.
ALAND, founded by Andrew Hrsto over two decades ago, topped out the tallest of the two towers at Archibald by ALAND, their first foray into the Gosford market.
The mixed-use development, with both apartments, a hotel and extensive retail, is another suburb redefining development for ALAND.
It will bring the first VOCO Hotel to Gosford, as well as 327 apartments and six hospitality venues, including the Central Coast’s highest rooftop bar.
Over 95 per cent of the apartments in the development have already sold, marking the project one of the most successful across Greater Sydney for several years.
Looking ahead, Fortis filed plans for another boutique development in Rose Bay.
Earlier this year Fortis, the development arm of financier and investment manager Pallas Group, snapped up a prime double site on Ian Street, just two rows back from Rose Bay Beach.
They're planning a $16.5 million development, continuing their push into in supplying new apartments to downsizers in Sydney's Eastern Suburbs. There is just one two-bedroom apartment planned and 11 three-bedroom apartments across the low-rise, five-level building designed by MHN Design Union.
The submission comes as Fortis prepares to take the wraps of Atlas, its current Rose Bay development.
August saw the partnership revealed between prominent Wollongong developer Level 33 announced and community affordable housing provider, City West Housing, to bring a much-needed influx of apartments to the growing coastal city.
They've proposed just over 900 apartments in a State Significant Development, of which around 220 will be affordable.
The leaves nearly 700 apartments that will hit the traditional off the plan apartment market in the coming years, pending NSW Government approval.
The 30,130 sqm site at the intersection of Gipps and Flinders Streets is currently occupied by an old Bunnings Warehouse which ceased trading at the start of 2023, as well as extensive car parking space and a small brick building.
The apartments, will be spread across five mixed-use buildings, ranging in height from seven to 13 levels.
The ground floor of the buildings will be dedicated to business and retail spaces, takeaway food premises, specialised retail, and a gallery. The proposal also includes two levels of basement parking, with vehicle access from Throsby Drive and Gipps Street.
The project will be constructed in stages, beginning with Buildings 4 and 5, the latter of which will house the affordable apartments.
