Developers are seeing big opportunities in Sydney apartments, with new projects flowing through the planning system likely to be attractive to investors as well as owner-occupiers priced out of Sydney’s soaring established housing market.
Capital growth in Sydney’s housing market has doubled that of units in the year to date, with the Harbour City recording a nation-leading 20.9 percent uplift in house values so far in 2021, according to CoreLogic.
But recent research by the Housing Industry Association unearthed some surprising strength in Sydney’s multi-residential market, even as the median value of units rose by a more pedestrian 10 percent in the first seven months of the year.
HIA economist Tom Mott said multi-unit commencements in Sydney had returned to pre-pandemic levels, with recent approvals supporting an upwards trend.
Medium density units gaining approval have also reached a 25-year high, Mr. Mott said.
“This suggests the underlying shortage of apartments in Sydney was far greater than previously thought,” he said.
“Record low interest rates are helping to unleash this pent-up demand.
“Investor activity has also emerged. These buyers are looking through the haze of the pandemic in anticipation of a return of overseas migration.”
On the Lower North Shore, a recent penthouse sale neatly illustrated the depth of buyer demand, setting a new per-square meter record for the prestigious area.
Luxury developer JQZ said the first penthouse at its 88 by JQZ development, currently under construction in St Leonards, sold for $10.5 million, equating to $52,239 per sqm.
Apex Investment Alliance managing director Denis Wan, who is handling marketing on behalf of JQZ, said he and his team were surprised at how quickly the buyer moved after being presented with the opportunity.
“The sales contract was exchanged in just seven days from when the penthouse was unveiled to a select group of potential buyers at an event on Friday, June 11, so this buyer certainly didn’t waste any time,” Mr. Wan said.
“Penthouses are a big trend at the moment but there’s a limited supply, particularly on the Lower North Shore. That’s why they are achieving such impressive figures.
“I won’t be surprised if we continue to see record prices, as we have more buyers than penthouses available.”
One of the biggest projects added to Sydney’s development pipeline is Avenor’s latest luxury apartments tower East Walker Street, which recently got the green light from planning authorities.
East Walker Street will comprise a 30-story tower containing 280 apartments, to be built in the heart of North Sydney.
Avenor managing director James Paver said he believed the timing was right to advance the project, which has been in the planning phase since 2017 when the developer started amalgamating several separate plots to facilitate its development.
– Dan wilkie