The Loewy Blog Edition 3

Important Real Estate Shift

The writer spends many hours of research each week determining the best way to invest in real estate, what and where represents good acquisition value, how to add value and the best future locations.

I would like to share with you a trend that is becoming all to evident .

Whilst I do not know whether this phenomena is a permanent or temporary shift, that there is a change in the location that many regard as the desired home location, is without doubt taking place!

So where are these locations and why is this happening?

Lifestyle and economics generally combine to determine where we prefer to live (or have to live). So when the lifestyle you prefer is less expensive than where you currently reside the temptation to buy (or rent) in that area provides the motivation for relocation .This is precisely what has happened to BEACHSIDE suburbs such as North Bondi, Bondi, Bronte, Clovelly, Coogee, Lurline Bay, Maroubra and even as far as south as Little Bay .Ex multi million dollar house dwellers from established suburbs such as Bellevue Hill, Darling Point, Point Piper and Vaucluse are amongst those who have made the switch .

These generally reasonably well to do home owners (or overcommitted mortgagors) or renters are predominantly under 50 and are drawn to the beaches for their daily exercise, baby walks, coffee and vitamin D intake.

Suburbs within an easy baby stroller distance of these beaches have also benefitted from this change, e.g. east Randwick.

Whilst sales prices (if the house or high price apartments could be sold at all) have fallen significantly in the previously most desirable suburbs of the eastern suburbs the seaside suburbs mentioned have either held their price and in select cases even managed a slight increase in value. Even in instances where a seaside suburbs home dropped in value the fall was smaller than that experienced by the old suburbs .

Along with the desired location shift it is also observed that persons acquiring in the beach side suburbs are prepared to reside in far smaller apartments than that which were offered in suburbs such as Bellevue Hill and one would guess this may be as they spend less time at home .

It is fair to say that the value per m2 in these new desired destinations is equal to and at numerous addresses exceed the previously desirable addresses .This is however compensated by peoples willingness to occupy smaller premises, where frequently large gardens with pools are traded for courtyards and the Pacific Ocean as your pool!

So if climate change and consequential predicted rising ocean levels are a threat, many of Sydney’s reasonably well to do (or over leveraged) are not yet frightened off or buying in the Blue Mountains ..... just yet .

Peter Loewy

Disclaimer - The material contained in this newsletter does not constitute advice. DPL is not responsible for any action taken in reliance on any information contained in this newsletter. Anyone reading the newsletter should not act upon material contained in this newsletter without appropriate consultation.