Original article written by Annabel Hennessy for The Daily Telegraph, 29 October 2016.
Billion-dollar infrastructure projects in Sydney’s West have seen prices skyrocket to the extent that property owners are now selling up and reinvesting interstate.
While Queensland had previously been the top choice for Sydney investors, Melbourne’s latte-sipping hipsters should be bracing themselves for a Western Sydney takeover as the Victorian capital starts to rank higher on the buyer radar.
Some Melbourne estates are now reporting that 10 per cent or more of their buyers are coming from Sydney.
New data from realestate.com.au shows Melbourne apartments are receiving more interest from Sydney investors than local NSW suburbs.
Based on suburb searches, Melbourne’s CBD was the second most searched for location from NSW buyers — outranking every local suburb with the exception of Alexandria. South Brisbane ranked as the 10th most searched for suburb.
NSW was the only state in the country to see multiple areas outside its own state in the top 10.
It comes as CoreLogic statistics show million dollar house prices have become the new norm in the Greater Parramatta area — with nine of the region’s suburbs crossing into the million-dollar territory for the first time over the past year.
Parramatta’s median house price now sits at $1.02m. Other patches that have become million dollar suburbs are Ermington, Northmead, Dundas and Rydalmere. A year ago the only million-dollar suburb in the Greater Parramatta area was Epping.
In comparison Melbourne’s median house price is $613,000.
REA chief economist Nerida Conisbee said it was unsurprising that Western Sydneysiders were now looking to Melbourne as a cheaper alternative.
“For Western Sydney people there’s obviously that opportunity to cash in on the boom and reinvest in Melbourne where they’re likely to find something bigger for less money,” Ms Conisbee said.
“For blue collar workers that you might find in Western Sydney, Melbourne likely presents the same sort of job prospects, but property is obviously more affordable.”
Matthew Planner is the project director for the Merrifield housing estate about 30km north of Melbourne CBD. Mr Planner said of the 1200 lots sold so far more than 10 per cent of them had gone to Sydneysiders — the bulk of which were from the west.
“I think the main thing driving them is affordability. Here they can buy a house and a land package for less than what a block of land in Sydney would cost them,” Mr Planner said.
“They are also close to the city here. So we’re seeing both investors and those who are actually making the move over. A lot of them (are) families who want their kids to have a backyard.”
Marshall White projects director Leonard Teplin works on more than 15 developments across Melbourne and said he had also observed the rise of Sydney buyers.
“I largely see investors, but some buy initially as an investment with the view that they will move themselves later,” Teplin said.
“What surprises me is that often they’ll buy blind online without viewing the property first.”
AFTER more than 10 years in Parramatta, Harish Mohindru and his wife Krishma are finally ready to say goodbye.
Mr Mohindru said they both loved the Western Sydney area but, after seeing house prices skyrocket, the couple are selling up and moving to Melbourne.
Mr Mohindru has sold his Parramatta apartment and is building a four-bedroom house in Melbourne’s Merrifield estate with his profits. He said it was hard to believe just how much Western Sydney had boomed in recent years.
“I think if I was to build a house here it would cost me about twice as much as it would in Melbourne,” Mr Mohindru said.
“Land values here have just kept going up and up.” “A lot of the nice houses in the area are a million dollars or more.” Mr Mohindru, who has a four-year-old son Nabbhay, said having a backyard had been a priority for the family. “A lot of my friends are doing the same thing — in Melbourne they can buy cheaper and closer to the city,” Mr Mohindru said. “It should be a good place to raise a family.”