Blue chip property in Sydney has been a standout performer over the past 10 years, with new data showing that values across the Harbour city have more than doubled.
According to CoreLogic, Sydney’s house prices increased 107.1 per cent over the past decade, making it the best-performing capital city market in the country during that time. The increase saw median values jump $724,221.
Regional NSW also performed well over the last decade, with house prices climbing 105 per cent, increasing the median by $379,694.
The top performed locations all came from Sydney’s eastern suburbs, led by Bellevue Hill where house prices increased a staggering 177.3 per cent, which saw the median price increase from $7 million to $11 million.
Dover Heights increased 157.7 per cent, taking the median price higher by $3.8 million to $6.2 million. While North Bondi surged 156.1 per cent, with the median increasing $2.8 million to $4.6 million.
According to CoreLogic, Sydney’s surging population growth coupled with falling interest rates were the big drivers of the price increases. They said that given the critical shortage of housing and the fact that immigration was now at record high levels, there is a strong chance that values could again double in the next 10 years.
Notably no other capital city markets were able to double over that period of time. Increasingly we are hearing about markets like Perth being strong, but when we look back at the data, it shows that Perth values have increased only 35 per cent in the past decade. Whereas Darwin actually saw values decline -0.4 per cent over the past 10 years.
Brisbane was the next best location with values higher by 86.9 per cent, followed by Hobart at 85.5 per cent.
CoreLogic said that if investors have the money to buy into the Sydney market then it is a very safe location to purchase and the capital gains are likely going to be better.
Blue chip locations are always going to be the areas that perform best over a long period of time. While some regional areas might boom here and there as we see with places like Perth and certain regional cities, on a long enough time frame, demand will always be greatest in the best areas.
That’s because there is always the highest level of demand for areas like Sydney’s Eastern Suburbs. These are aspirational areas that people want to live in. At the same time, the people who live and work here have the income to continue to buy and be able to afford to live in these areas.
In regional areas, there is always going to be a cap on how high prices can go based on the level of income. In blue chip areas, incomes are higher and growing and that will always be able to support higher prices.
There’s also very little reason for people to sell property in blue-chip areas. As values increase owners become more wealthy they don’t need to sell. This means that supply remains tight and that just adds more upward pressure on prices. It’s a cycle that keeps on going and pushes values up and up.
Over the long term, blue chip locations are always going to be the steadiest and strongest-performing markets. If you have the ability to buy into these markets, you should simply buy and hold and let the market do the work for you.
If you are interested in getting ahead in the property market, feel free to reach out to a Henderson buyer’s agent today for more information.