What has caused the inner west property boom and is it sustainable?
It is well documented that Sydney’s property market as a whole has skyrocketed to unforeseen heights in the past decade, however there are a number of metropolitan suburbs and areas that have seemed to benefit the most.
Included in said areas, is Sydney’s inner west; The area which spans from Strathfield, to Leichardt, to Newtown has undergone a median house price increase of 10.71% in the past 2 years, compared to the rest of the states average of 7.85%.
The inner west has benefitted from an increase in young property purchasers as well as a revitalisation in its transport systems, entertainment and education thereby increasing its market value.
Brett Smith from McClennan Steege Smith Property Valuations is a real estate appraiser who works largely in the Inner West area. He says that whilst the entire Sydney market is in a state of growth currently, the inner west is one of Sydney’s strongest markets and its due in large part to the change in the area’s demographics.
‘The area became popular with young up and coming professionals and that creates a snowball effect whereby like-minded people follow each other to new popular suburbs” he said.
Brett’s views are reinforced within Australia’s census data. These statistics note that among most suburbs in the area, the median age is younger than that of the states average, thereby encouraging a more youthful and vibrant feel in the area.
Along with this, with reference to the sustainability of the market, Brett doesn’t like to refer to the term ‘property bubble’. Instead, he makes note that all real estate investment is a ‘long game’, and the inner west does appear to be a viable market for the future.
‘There is no such thing as a property bubble’ he said. ‘Due to strong popularity of the Inner West, I believe this will under pin any future market corrections. Most markets will have a correction straight after a boom market. The loss in the correction does usually recover within a 12 to 18 month period’
New resident Chris Jones also speaks of this market sustainability as a reason for his recent purchase in the area.
‘Ultimately the gentrification that the inner west has been through and it’s increased popularity all give rise to sustainable growth. So, among some other factors, that long term growth was a key factor’ he said.