07.12.2023 Property News

What Types Of Development Do We Need In Sydney’s Eastern Suburbs?

What Types Of Development Do We Need In Sydney’s Eastern Suburbs?

Sydney’s eastern suburbs need five types of properties.

We look at what they are.

Prices in Sydney’s eastern suburbs property market are rising once again. And the main reason for this is clear: there simply isn’t enough property for sale to meet the level of demand.

CoreLogic notes that the number of listings right across Sydney in May 2023 was 15% below the same time last year and 24% below the previous five-year average. With too few properties for sale, buyers are becoming more competitive. We can even now see elements of the same FOMO (fear of missing out) that propelled the market to record heights in 2021.

With migration now returning in full force and the rental market growing increasingly tight, this situation could get even worse.

If we’re to change this dynamic in the long term, we need to start building properties right now. With that in mind, we explore the five types of housing Sydney’s eastern suburbs needs to urgently build more of.

1. Downsizer-appropriate stock: luxe, large apartments

One of the real keys to solving Sydney’s current housing situation is to build more properties appropriate for downsizers. So many people we speak to would love to list their family home and move somewhere that’s lower maintenance. The problem is that there is very little available that suits their needs, so they stay put.

As our population ages, downsizers are becoming an increasingly important demographic (although it’s worth noting that not all downsizers are older.) And we need more developments that are appropriate to them. This means single-level, spacious apartments and villas close to amenities and transport.

If we can get this right, it will mean more family homes are listed for sale, more people will be able to move up the property ladder, and there will generally be more activity right through the market.

2. Affordable housing: diversity is important

While there may be pockets of the eastern suburbs that are surprisingly affordable, by and large, our area is one of the most expensive in all of Australia. That means a lot of people who work in the eastern suburbs – and would love to live here – simply can’t afford to.

That’s not a good thing. Many employees such as teachers, nurses, emergency services and health care professionals are essential to our community. Others who perform essential but lower-paying work may prefer not to face hours-long daily commutes.

For this to happen, however, we don’t just need more housing. We also need more affordable housing that can be bought or rented by people who don’t earn huge salaries.

This is something recognised by the new State government, which has introduced a fast-track approval procedure for developments over $75 million that contained at least 15% social housing.

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3. Apartments for long-term living: excellent design and lifestyle

There was a time when apartment living was largely the domain of first-home buyers and downsizers. Today, we’re seeing more people choosing to live in apartments their entire lives – including with children. And why not? Apartment living can provide the opportunity to live a low-maintenance life in a prime area most cost-effectively and stress-free than living in a house.

For more people to take advantage of this trend, we need more apartments that offer generous, versatile spaces and privacy. We also need more developments with the kinds of facilities that make it possible to live a good life in higher-density surroundings: communal spaces, swimming pools, gyms, parks and other recreational facilities.

This will be one of the challenges for developers in the eastern suburbs over the next decade: not just to build apartments but to build the kind of apartments that people would gladly choose over a house.

4. Adaptive reuse: old becomes new

While the eastern suburbs may be everything to those who live here, look at any map of Sydney, and you’ll see that our part of the world is really not that big. In fact, we’re the smallest region geographically in the whole of our city, other than the CBD itself. That means land here is at a premium because most of what can be used has already been used.

One way to create the residential housing we need is to repurpose existing commercial, industrial or public buildings. That’s exactly what we saw with the former Royal Hospital for Women in Paddington – which was transformed into a fantastic residential development. We’ve also seen it at the old Prince Henry Hospital at Little Bay, with the new “town centre” at Green Square, and in other areas from Bondi Junction to Potts Point.

We expect this will be one of the key trends that take shape over the next few years as public buildings or commercial or industrial zonings are converted to residential.

5. The missing middle: terraces and townhouses

Finally, it’s worth noting that not everyone wants to live in high-density high-rise developments. A lot of people would prefer a compact house.

While older terraced houses may be hugely popular and common in some of Sydney’s eastern suburbs, such as Paddington, Redfern, Surry Hills and Darlinghurst, other parts of the east simply don’t have enough of them. This ‘missing middle’ in Sydney’s property stock is something that has been noted for many years now and yet another factor that needs to be addressed.

Of course, one of the key challenges for this is that eastern suburbs property tends to be expensive, so developers often need to maximise the number of dwellings they put on any land. That means, without some form of government assistance, any low-scale developments are likely to be top-end ones, where the value of the dwelling that’s sold makes it viable enough to keep the project small.

Want more?

If you’re thinking of buying or selling in Sydney’s eastern suburbs, get in touch