Potts Point attracts a huge variety of buyers for fairly obvious reasons: locations, views, transport, amenities, lifestyle and more.
But as one of Sydney’s most densely packed suburbs, residences in Potts Point rarely have a room to spare. Those who do seek those extra square metres are likely to find them with a premium price tag attached.
So how does housing stock affect housing price? And what does that mean for those in search of their perfect abode?
In 2013, Potts Point was found to be the second most densely populated suburb in all of Australia, after Pyrmont. The 2016 census showed 9,423 people fighting for elbow room (or a parking spot) in 70 hectares.
Of course the density is what makes the suburb vibrant, fun and cosmopolitan, and is actually a drawcard, for those who want to live here. But the reason that it comes across as crowded on paper is that almost 88% of properties in the area are units and almost half of all dwellings consist of just one-bedroom flats.
Supply and Demand
This is where supply and demand comes into play for people wanting to buy in the area. Young corporate types can get their foot in the market and purchase a studio or one-bedroom unit for a reasonable price, given proximity and lifestyle. And couples are able to find something with a parking space and room to breathe, like 1C/6 Macleay St.
But those looking for something more uncommon for the area, like a house or terrace may face a challenge. Terraces, semis and townhouses make up just 10% of the stock available. This is exactly why in 2016 one of my sales set a new record for terrace properties in all of Australia: $13 million for Saraville on Challis Ave
This limited supply explains the fact that a lot of the bigger properties in Potts Point are so tightly held. Even the turnover for smaller dwellings is not as high as it could be. Maybe because the majority of residents in the area – 65% – are renters, which means that it’s pretty easy to convert a starter home into a long-term investment.
Even though there are more apartments on the rental market in Sydney than ever before, thanks to the developments in Alexandria and Rosebery, the price of rentals in Potts Point and Elizabeth Bay have continued to grow. Leases have increased by 7% in the last three years.
In part, this has been driven by the growing appeal of the area to demographics other than young professionals.
The changes to Kings Cross lock-out laws make the area more appealing to families and downsizers, who are making their way back to the community. Which also makes Potts Point property a great investment.