Sydney's Northern Beaches stretches from Manly in the south to Palm Beach in the north. The area is well known for its beautiful beaches, relaxed lifestyle and prestigious properties.
The Northern Beaches property market has been one of the hardest hit in the country as a result of rising interest rates. Every suburb's median price within the Northern Beaches has declined over the past 12 months, with some suburbs showing over 20% decline from their peak.
This comes as no surprise though, given that we're talking median house prices ranging from $1.5mil - $4.0mil and units ranging from $700k - $2.0mil. Many home buyers within this area are heavily mortgaged and with just 1% rise in interest rates, it has a huge impact on their borrowing capacities and loan repayments.
The Northern Beach's median house price currently sits at $2.42mil compared to $2.88mil in April 2022, a decline of 16% in 12 months. Overall, the median house price has retracted significantly from its all-time high of $3.08mil in October 2021 (18 months ago), resulting in a decline of 21.4%.
The median unit price currently sits at $1.49mil which has taken only a slight dip from 12 months ago, where it was sitting at $1.58mil, a decline of only 5.7% during this period. Overall, the median unit price has retracted conservatively from its peak of $1.60mil in January 2022, resulting in an overall decline of 6.9% - only a third of that compared to house prices.
There is a positive to all of this, if you're in the market to buy a property here. The overall market correction is providing some good buying opportunities in the Northern Beaches, as you could save around $500k compared to peak prices.
Top 5 best performing suburbs in the last 12 months (houses - median price):
Palm Beach -6.70%
Curl Curl -9.27%
Wheeler Heights -9.85%
Balgowlah -10.79%
Mona Vale -11.82%
Top 5 best performing suburbs in the last 12 months (units - median price):
Belrose -0.73%
Avalon Beach -0.78%
Fairlight -2.22%
Manly -2.34%
Collaroy -2.89%
Top 5 worst performing suburbs in the last 12 months (houses - median price):
Brookvale -23.80%
Dee Why -22.98%
North Narrabeen -21.05%
Manly -20.72%
Clareville -19.74%
Top 5 worst performing suburbs in the last 12 months (units - median price):
Dee Why -17.76%
Warriewood -17.69%
Manly Vale -15.40%
Queenscliff -12.04%
Seaforth -11.66%
For the investor, there's also some good news here. The average rental yield for houses has increased by 27.54% over the last 12 months, as a result of rents continuing to climb, whilst property prices have come down. The average gross rental yield for houses is currently sitting at 2.21% based on the median rent of $1,031 per week.
For units, the average rental yield has increased by 8.93% over the last 12 months, with a median rent return of $728 per week.
When buying in blue-chip markets like the Northern Beaches, most investors are focused on capital growth, rather than cash flow, however it could be a win/win scenario here.
The vacancy rate currently sits at 1.90% (March 2023), indicating that there's little supply but plenty of demand from renters. As we begin to see international students return to Australia, along with migration and expats coming home, this is putting pressure on the availability of rental properties, so it's not such good news if you're looking to rent.
When asked where to live in Sydney, a lot of people always say they’d love to live in the Northern Beaches. Wilder and more distant than Sydney's eastern strands, the Northern Beaches are a must-see. Although you'll most likely approach them as a day trip, they're very much a part of the city, with the suburbs pushing right up to the water's edge. Some neighbourhoods are ritzier than others, but what they all have in common is a devotion to the beach.
As always, whenever buying real estate, it's important to look at the long-term performance. The Northern Beach's median house price has grown by 105% and units by 109% over the last 10-years alone (even with the latest price corrections), confirming that holding long-term provides a solid return on your investment.
If you are looking for a buyer’s agent to assist you with purchasing a home or investment property in Sydney's Northern Beaches, please get in touch with Tome Avelovski and his team at Ready Set Buy - Property Buyer's Agents or give us a call on 1300 289 372!
Disclosure: The information contained in this blog is our personal opinion only and is not to be taken as financial advice, as we do not know your financial situation. Please speak with your accountant or any other licensed professional for specific advice based on your own personal circumstances. We will not be held liable for any losses.
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