It seems hard to believe that 100-150 years ago Point Piper, Mosman, Hunters Hill and Vaucluse weren’t considered the pinnacle residential suburbs they are today. In fact, Strathfield/Annandale was an area that had that cache. If you visit these suburbs today you will still see many substantial Victorian and Federation houses. What you don’t see is the vast gardens and grounds that often surrounded them. These were subdivided into more modest residential blocks in the twenties to forties.
Then, the harbour didn’t hold the appeal it does today. It was a working harbour filled with barges and cargo ships. Plus, it was a sewer for all and any kind of industrial waste. In my lifetime, I’ve witnessed the tail end of Parramatta River’s transformation. As a schoolboy in the early eighties I rowed on this part of the river and the last thing you’d do then, was swim in it! At twilight, the boat’s slipstream would literally glow in the dark!
Gone are the sale yards and abattoirs at Homebush, the coal fired power station at Balmain and many of the factories from Canada Bay to Parramatta. Those that remain are (rightly) encumbered with strict environmental laws and regulations. The river and the harbour have been rejuvenated and transformed into a jewel that everyone wants to live beside.
Another demographic shift occurred in Sydney’s Eastern Suburbs in the nineteen forties. It’s not oft referred to now, but during WWII Japanese ships would sit off the coast and fire in shells trying to hit ships in the harbour. Vaucluse and Rose Bay copped more than a few stray bombs. As a result, prices in the area fell and people moved away from the coast. Suffice to say prices recovered quickly after the war ended and some wise money did well.
My point here is that our city is constantly evolving and responding to demographic shifts and right now there is one occurring in inner Sydney due to the current Covid19 environment! Recently an Eastern Suburbs agent told me there were over 250 VACANT one/two-bedroom apartments for lease in Kensington, an international student hot-spot surrounding UNSW. Twelve months ago, he estimated that number would have been 15-25. Rents are down by 20-25% and vacancy in some cases has stretched for months (rather than days). A similar story has emerged in the inner west around Sydney University and UTS. On top of this is the decline in AirBnB customers which has led to a flood of furnished properties on the long term (6-12 month) rental market. This rental decline must influence the investor market in the area and, come the Spring sales season I think it might start to bite!
Nature hates a vacuum! Given the desirable location of these areas I anticipate they will fill at the reduced rental rates with young professionals, nurses and other health professionals (both areas have major hospitals) etc. looking to be close to the city, work or Eastern beaches. If you believe (as I do) that international students shall return in 12, 24 months, then an opportunity is there to find a great property with inevitable rental upside in the short to medium term.
There’s always value in great property. Find it. Buy it. Love it!