Cremorne (Sydney)

[nsy]

A few mates have commented that properties in Cremorne (Sydney) and surrounding areas have been flat for a few years and might even have fallen. What I like about the area is the convenience, access to city, proximity to water and good tenants. I also like the idea of buying in an area that is currently less (positively) affeced by the first home owner grants.

I am a bit concerned though wondering though as to whether properties in that price range (approx $1.2m) will continue to appreciate – there is only so much tenants are willing to pay in rent and this might cap the capital appreciation.

Any thoughts?

 

[Propertunity]

The median price for a home in Cremorne is presently just under $1.1M. According to actual sales data in 2009 the median price has dropped by nearly 33%. Many would see this as a buying opportunity.

Others may see it as the sky falling. It may of course simply reflect houses in the cheaper price range (if you can call $1M cheap ) being the ones sold.

 

[see_change]

We bought two units in Mosman end of last year towards the lower end of the market .

We've looked at cremorne as well and there are certainly good buys to be had.

We've specifically looked at the lower end for investment in that area because that is the stronger rental market as there are always people who want to live there and will be prepared to what they need to pay to get in the area .

The upper market wasall accounts be badly hit rentally wise when the GFC hit , but I'm not sure how it is going at the market .

The price range you're talking about certainly appears to be good value purchase wise at the moment ( and is an option on the table for us at the moment ) , but you'd specifically need to talk to a few property managers ( not agents ) to see what the current and longer term demand for that type of property is .

We contemplated furnished rentals as an option for the two we bought , but every agennt we talked to , including one's who specialised in that type of accomodation said there was a long term over supply in that market and advised against it .

Cliff

 

[Alabex]

i think the figures mentioned would more reflect the type of houses being sold. It is a similar situation on the northern beaches. the market of propertied over $2m has suffered as there is just simply not the buyer demand there... as a result many of these properties have been taken off the market. However the market around the $1m market is fine..... so there is plenty of stock on the market to match the demand. When you look at averages the medium price drops... but it needs to be looked at in a broader picture.

I would think in Cremorne you would be better off looking at a market around $500 -700k rather than the 1.2m market. YOu would get something that would be in higher general rental demand... renting around the $500 -600 pw and it should also continue to grow.

Steer clear of anything directly on Military Road or the other road that runs the 'back way'... the name is just escaping me at the moment but i think it is Ourimbar.... or something like that. HOwever you still need to be close to these roads for public transport.

 

[Jacque]

I like Cremorne (Cremorne Point is especially nice) and surrounds but you do need to select carefully, as there are some older dodgy unit blocks that will need a lot of work in the near future, as their age is beginning to show and warrant special levvies etc for the poor unfortunates who own them. Think lift upgrades, roofing and damp issues, foyer and hallway upgrades, carpark revamps etc. Look for healthy sinking funds and excellent strata managers.

I'd second Alabex's suggestions to stick to the $500-700K market for units especially if you're after rental returns. In the LNS you can buy houses for under $1m but the yields aren't great and they usually require some form of renovation or cosmetic revamp. I'm more a fan of Crows Nest/Naremburn/Waverton side myself, due to better access to rail, but Cremorne/Neutral Bay/Mosman does have the advantage of being closer to the water and so appeals this way. Kirribilli, North Sydney, Milsons Point, McMahons Point are also lovely- just make sure you find something with parking here as on street parking is tight!