02.28.2024 Buying Tips

Would You Pay Over $4 Million For An Extra Bedroom?

Would You Pay Over $4 Million For An Extra Bedroom?

We take a look at the data to find out how much an extra bedroom is worth in Sydney’s Eastern Suburbs.

You don’t have to be an economist to know that extra bedrooms add to the price of a property.

Simply look at suburb median price data and you’ll see that generally four bedroom houses sell for more than three bedroom houses, and three bedroom apartments sell for more than two bedroom apartments – although there are some exceptions, particularly with prestige or luxury properties.

But how much, exactly, does an extra bedroom cost you in Sydney’s Eastern Suburbs? We take a look.

Extra bedrooms are part of a lifestyle trend

Historically, people have always looked to “upsize” as their families – or budgets – grow. However, the desire for an extra bedroom escalated rapidly when the pandemic hit, as many of us suddenly found we wanted (or even needed) more space.

A lot of buyers that fell into this category wanted to use the extra bedroom as a home office as the work-from-home trend took hold.

But these aren’t the only buyers looking for an extra bedroom. We’re also seeing families increasingly view apartment living as a long-term lifestyle choice. Many of these buyers need an extra bedroom.

We find an extra bedroom is almost always on downsizer’s checklists too – often combining as a hobby room and somewhere to sleep the children or grandchildren. This explains the incredible downsizer interest in large three- or four-bedroom penthouses and sub-penthouses.

How much does an extra bedroom cost?

First, let’s take a look at a selection of entry-level apartments across the Eastern Suburbs.

As the data below shows, the cheapest suburb to gain an extra bedroom in an apartment is Kensington where the difference in value of one- and two-bedroom apartments is just $290,000.

At the other end of the spectrum, the most expensive jump from one- to two-bedrooms in apartments is in Bondi Junction at $595,000, followed by Paddington, where an extra bedroom will cost you $546,000.

Suburb Median one-bedroom apartment value Median two-bedroom apartment value Difference in price between one- and two-bedroom apartments (cost of an extra bedroom)
Centennial Park $710,000 $992,500 $282,500
Woollahra $820,000 $1,298,000 $478,000
Paddington $710,000 $1,256,000 $546,000
Bellevue Hill $775,000 $1,240,000 $465,000
Potts Point $800,000 $1,438,500 $638,500
Randwick $771,500 $1,157,500 $386,000
Bondi Junction $820,000 $1,415,000 $595,000
Rose Bay $875,000 $1,250,000 $375,000
Kensington $670,000 $960,000 $290,000

There is more at stake if you want to upgrade from a two-bedroom apartment to a three-bedroom apartment, as the table below shows. (NB: so few three-bedroom apartments transact in some suburbs that data is unavailable).

What’s interesting here is that the three-bedroom apartment market includes penthouses, as well as more typical three-bedroom apartments. This can skew the median price for that extra room far higher, especially in suburbs with harbour views. For instance, in Potts Point, there is a $4,761,500 price difference for a third bedroom in an apartment.

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Even in suburbs with a less pronounced gap, such as Woollahra and Belleview Hill, the difference between a two-and three-bedroom apartment is greater than the median price of a two-bedroom apartment alone.

Again, the Eastern Suburbs’ cheapest upgrade is in Kensington, where an extra bedroom costs just $315,000.

Suburb Median two-bedroom apartment value Median three-bedroom apartment value Difference in price between two- and three-bedroom apartments (cost of an extra bedroom)
Centennial Park $992,500 n/a n/a
Woollahra $1,298,000 $2,935,000 $1,637,000
Paddington $1,256,000 n/a n/a
Bellevue Hill $1,240,000 $2,770,000 $1,530,000
Potts Point $1,438,500 $6,200,000 $4,761,500
Randwick $1,157,500 $1,950,000 $792,500
Bondi Junction $1,415,000 $2,075,000 $660,000
Rose Bay $1,250,000 $2,900,000 $1,650,000
Kensington $960,000 $1,275,000 $315,000

Houses a slightly different story

Houses tend to have a much higher starting price point than apartments in our area. However, if you’re looking to gain an extra bedroom in a house, you’ll generally need to pay even more again.

Generally, the more expensive the suburb, the more expensive it is to go from a three- to four-bedroom home. A fourth bedroom costs a median of $4,512,000 in Vaucluse and $3,465,000 in Bellevue Hill.

Suburb Median three-bedroom house value Median four-bedroom house value Difference in price between three- and four-bedroom houses (cost of an extra bedroom)
Paddington $3,100,000 $3,925,000 $825,000
Woollahra $4,112,500 $5,902,000 $1,789,500
Queens Park $3,112,500 $4,250,000
Bellevue Hill $6,875,000 $10,340,000 $3,465,000
Vaucluse $4,350,000 $8,862,500 $4,512,500
Rose Bay $3,800,000 $5,479,000 $1,679,000
Bondi $3,010,000 $4,900,000 $1,890,000

But it’s not quite that simple

While it’s interesting to analyse this data, as we said at the outset, there are exceptions to the rule.

Sometimes a two-bedroom apartment will sell for much more than a three-bedroom apartment due to the street it’s on, the building in which it’s located, the views from the living area or add-ons such as parking, outdoor space or lifts.

Likewise, a superbly located waterfront three-bedroom house, or one on a very large flat block, may sell for more than a larger four-bedroom house. And so on.

Houses with more bedrooms also tend to have more living space, a bigger footprint and often more bathrooms. In an apartment, adding an extra bedroom can mean an extra parking spot, while in a house it can (but doesn’t always) mean more land.

Housing stock varies from suburb to suburb, creating micro-markets with their own unique characteristics, which can impact the price of an extra bedroom. For instance, in inner-city Potts Point around 87% of dwellings are apartments (many of them are older, smaller apartments), while houses and larger apartments are scarce. This goes some way to explaining the enormous $4.7615 million difference in two- and three-bedroom apartment prices.

Want more?

If you’re looking for an extra bedroom or otherwise upsizing in Sydney’s Eastern suburbs, get in touch.