How Sydney suburbs can withstand a ‘bubble burst’

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NSW is premier state for home building

How Sydney suburbs can withstand a ‘bubble burst’

Australia’s Daily Telegraph has recently outlined the three factors that can prevent a suburb from experiencing the ‘bubble burst’ that so many commentators are fond of predicting.

This bubble burst predicts the moment when Australia’s property boom from the last few years falls flat – when houses struggle to sell and prices drop. In order to beat this scenario, a suburb should tick three boxes.

Those are; sustained residential development, significant growth in surrounding areas, and proximity to the central business district.

As highlighted in the original Daily Telegraph article, there are a number of Sydney suburbs that get to claim all three traits. These include (perhaps a little unsurprisingly) Pemulwuy, Waitara, Darlington, Chiswick, and Waverton.

So what is it about those three characteristics that give a suburb a level of immunity to a property slump?

Sustained residential development

The idea of an area undergoing constant residential development is an appealing one to those looking to purchase or invest in a particular suburb.

In July this year, Sydney saw a massive 2,400 development applications for new apartments, which marks the busiest month on record. There are 100 new homes built in the Sydney area every week, and the current busiest development spot is Green Square, where it’s predicted that more than 54,000 people will live by 2030.

Such growth and investment tends to be a good sign as it helps bolster the area with desirable new properties.

Significant growth in surrounding areas

Similarly, if one suburb sees significant growth, it only stands to reason that nearby areas may receive a boost as well. After all, if Darlington is one of the most desirable suburbs in Sydney, it makes sense that Redfern will bask in some of that glow, too.

City of Sydney executive manager for strategic planning Andrew Thomas talked about why there have been so many new applications for apartment developments and why the demand to live in them will no doubt be high.

“Because the City is spending more on infrastructure like roads and footpaths, street furniture, libraries, childcare centres and playgrounds, it makes high density living more attractive.”

Proximity to the CBD

Residential buildings near to the city will always be in high demand for anyone who wants to be close to work, or even simply close to the hub of the city with its shopping areas, entertainment options and bustling atmosphere.

In a survey, being close to the CBD ranked in 10th place for what Australians are looking for in a suburb with 13 per cent of people marking this feature as a priority. Interestingly, New South Wales stood out in that buyers ranked ‘being close to work’ as the third most important factor compared to other states where it was ranked sixth or seventh. Also, ‘being close to supermarkets’ was less important to those in NSW than it was for people in other states and territories.

Michelle Hutchison of Finder added her own suggestions to those looking for a good suburb that will last the test of time.
“Pick a location with valuable features such as a high rental potential, low crime rate, and close to schools, recreation and shops. The more a suburb has to offer, to more likely it is to be able to resell in future regardless of market conditions.”