Sydney’s terrace houses have come full circle.
Desirable when they were first built, these classic Sydney properties then fell out of favour for years and many were lost to demolition. Now they’re fetching millions at auction. Why the turnaround in public opinion? And what are buyers looking for when they bid?
Terrace houses: A miniature history
First built to accommodate booming populations in Sydney and Melbourne back in the 1880s and 90s, the vast majority of terrace houses fell deep into disrepair once Australian homeowners moved out into the suburbs in search of larger blocks. Those that weren’t demolished often fell victim to some of the worst examples in home renovation.
Today, surviving terrace houses are often in some of the most prime locations. In Sydney, Potts Point, Paddington, Surry Hills and Darlinghurst all boast terrace houses that can regularly fetch upwards of $3 million or $4 million at auction.
A record-breaking terrace house sale
With the right history, location and attention to interior design, prices for terrace houses can climb much higher than the average. That’s what I encountered when I sold Saraville – 29 Challis Avenue in Potts Point – for a record-breaking $13 million in early 2016. One of the many remarkable things about this sale was the fact that it had been purchased for just $5.25 million two years before.
Sydney’s lockout laws are boosting terrace prices
One of the factors that went into this huge increase in value was the change to Sydney’s late night last drinks and lockout laws. With Kings Cross now a much safer place to be after dark, property prices in Darlinghurst and neighbouring Potts Point are on the increase. The value of terrace houses in particular has gone up somewhere between 30% and 40% since the laws were introduced.
Why terraces have the perfect balance
So why are terrace houses in particular gaining so much traction? The answer lies in the types of buyer looking to claim their place is Sydney’s east. Younger buyers, smaller families, downsizers and renters who tend to want a balance of lifestyle and location are attracted terraces because:
- They offer a large enough floor plan to give residents room to move within a more reasonable budget than a freestanding house in the same area.
- Most terraces have at least some outdoor space, but don’t come with a huge garden to maintain.
- Classic renovations offer an old-world charm not easily found in a new development.
- Pets can usually be accommodated, even in smaller terraces.
- They’re almost always in easily walkable inner city locations, with great local restaurants and bars.
Even as the city changes around them, it seems Sydney’s terraces have now taken their place as a key feature of the streetscape and the real estate market. For buyers and renters alike, the terrace house is definitely no longer a compromise but something to aim for.