Forget the gloom and doom of the global economic crisis. The June 2009 quarter House Price Index released by the Australian Bureau of Statistics on 4 August 2009 indicates an increase in Sydney of 4.9%. The national average is 4.2%. However, this is not the full story and there will always be areas that outperform others.
The key for property investors looking for future capital growth, is to spot an area with good growth potential and that means finding an area that currently presents good value for money. When compared with other parts of Sydney within 10km of the CBD, one such area appears to be the Inner West.
Area Profile: The Inner West
Located to the west of the CBD the suburbs including Annandale, Balmain, Camperdown, Enmore, Erskineville, Five Dock, Glebe, Haberfield, Leichhardt, Lilyfield, Newtown, Petersham, Stanmore and Rozelle are renowned for their eclectic mix of cultures, cafes and cuisine. Formerly working class suburbs which have now become trendy, they have retained much of their original diversity and character.
Drawn by the proximity of the CBD, young professionals and executives are being attracted in increasing numbers to both finely restored houses and unrestored gems. In addition, the Cross City Tunnel has significantly improved access to the Eastern Suburbs and its beaches.
But there is another reason to consider the Inner West. When comparing its median house prices with parts of the Eastern Suburbs, many of the suburbs in the East have a median house price well in excess of $1m. In contrast, the Inner West’s most expensive suburb is Haberfield with a median of $1,131,000.
It is this disparity between the East and the Inner West that may present opportunities for the savvy investor looking for good capital growth and many experts are now predicting that the house prices of the Inner West will begin to catch up with parts of the East over the next few years. The table below illustrates the current gap between the Inner West and Eastern Suburbs:
