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Tips For Buying » CAMMERAY: SYDNEY’S NEXT HOT SPOT?

11 Feb 2015 (09:10)Author: Administrator

Cammeray: Sydney’s next hot spot?

About Cammeray
Cammeray is located on the lower North shore of Sydney, approximately 5km from the CBD. The suburb is established with mature trees, waterfront reserve and low-rise residential dwellings.
The population is about 7,000, of which the majority are aged 30-39, and are professionals earning over $100k pa in either single parent or childless couple households. In terms of occupancy, the majority of households are renters, suggesting that there are a high number of investors in the suburb.
Cammeray is well serviced by public transport to the City and Chatswood. It has a shopping centre, local shops and a strong cafe/restaurant culture as well as parks and sporting facilities including golf course. It has good childcare facilities as well as two schools.

Hot spot Report
Recent media reports suggest that Cammeray is in the top ten property hot spots.
The realestate.com.au report was picked up by all major papers, both in Sydney and interstate and drew plenty of commentary. There were further related articles published declaring the whole of the lower North shore as an undervalued hot spot. Not surprisingly, these reports were based on interviews with local real estate agents, who clearly have their own agenda to sell property in these areas, and continue to compare the lower North shore to suburbs in the east.

So what does the data mean and who and how was it determined?
The analysis was based on a simple demand:supply ratio by www.realestate.com.au. It took the average number of listings over three months in each suburb and compared these to the number of "hits" of people looking for property on the internet. Compared to other suburbs in Sydney, Cammeray had more direct "hits" per property on the market than any other suburb. A look at the data from 1 February 2014 to 31 January 2015 shows that there were 1433 searches per property in Cammeray compared to 421 in Sydney generally on realestate.com.au. This suggests that Cammeray has been more popular for inquiries for an extended period of time beyond the three month analysis in the report, and significantly more than the average for all suburbs in Sydney.

Is Cammeray really the next real estate hot spot?
In real estate, there are leading indicators, and lagging indicators. Leading indicators include the number of properties on the market, numbers of open house viewings, and Internet viewings.
While the data included in the report by realestate.com.au may be a leading indicator of potential demand, buyers need to be careful in relying on this as a predictor of future demand, capital growth, and yields. Just because there are large number of hits on a website, doesn't always translate to actual demand and capital growth. Lagging indicators include medium sales, days on market, capital growth, rental yield, suburb demographics, and approved infrastructure and development. In my experience, these lagging indicators can sometimes be better predictors of a suburbs long term potential than leading indicators.

It is also important to examine the lagging indicators of neighbouring suburbs. For example, Cammeray only becomes attractive to buyers once it is considered comparatively better value than its neighbouring suburbs. If we just look at the median price for Cammeray for a unit, we can see that it currently sits at $783k with capital growth of 5.0%pa or 47.7% over the past 8 years. If we look at neighbouring Cremorne, we can see that the medium price for a unit is $40k more at $823k with capital growth of 5.1%pa or 48.6% over the 8 years. If we look at Wollstonecraft, on the other hand, the medium for a unit is $819k, or $36k more than Cammeray, with capital growth of just 1.3% or 10.7% over the five years. So for someone looking in that area, Cammeray may be more attractive as it may represent better value for money than neighbouring Cremorne or Wollstonecraft. This may be one of the reasons why there are more people looking for property in Cammeray than its neighbouring suburbs.
The above data is sourced from www.realestate.com.au as at 8 February 2015.

Take Home Messages
So what does this all mean?
Take home message #1 - look outside the square. Whether looking at leading or lagging indicators, those looking to buy need to consider neighbouring suburbs in their search which may represent better value for money while still meeting your needs.
Take home message #2 - no one has a crystal ball. For lagging indicators, past performance is not a guarantee of future performance...likewise, for leading indicators, hits don't necessarily translate into sales and future capital growth.
Take home message #3 - do your own research. Don't rely on real estate advice from anyone who isn't independent. Use an independent buyers agent who specialises in your search area to take the guess work out knowing where to look.

 

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