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Northern End CBD Overview:
Situated at the northern end of the CBD this report includes data for developments:
• Stamford Marque
• Stamford on Kent
• Stamford Residences
• Cove
• Georgia
• Highgate
• Portico
• Quay West
• Observatory Tower
With regards developments in the Northern End of the CBD, this market is a little more established that means
you tend to find more stable turnover. As always there are exceptions; notably Stamford Residences transacted
11 sales in 2015. Reviewing trends of other new developments I anticipate turnover to drop to around 5 to
7 transactions and falling below 5 transactions in 2016 and 2017 respectively. Reasoning is based on that
the developer finally sold their remaining two penthouses in 2015 and the continuing reduction of the pool of
property owned by investors as owner occupiers buy in and move in. The knock on effect is that those landlords
that remain will see more competition for their apartments and rental prices will at least hold or increase in the
coming years.
Another exception is Cove with 20 sale transactions in 2015 double that of 2014 (10). I think this can be explained
by the fact that the one of the best performing areas of the market was property with values that ranged from
circa $600,000 to $1 million that fell into the one bedroom apartment category that performed incredibly well.
After a prolonged period of low growth if an apartment was worth $800,000 and 12 months later increased by
$200,000 to $1 million many vendors could be persuaded to cash in. For example real estate agents would be
phoning vendor after vendor saying they have a buyer at $1.2 million will you sell? Many would have bought in.
Due to the rapid growth in this market I think it was a similar to algorithmic trading as soon as they hit a figure
vendors simultaneously pressed the sell button. Now, I have not broken them down by aspect however reviewing
just one bedroom sales in Cove; there were 12 transactions in 2015 with an average sale price of $1,106,666
compared to just 6 in 2014 with an average price of $871,666. The square metre rates for all apartment sales
increased from $14,164 in 2014 to $16,338 in 2015.
In 2015 Stamford Marque had the lowest CAGA result of 2%. The development of course has been impacted
by the Barangaroo development. I think a lot of sellers decided to get out early in 2013 - 2014 and since then
turnover has fallen which is good sign for vendors as those who really wanted to get out have now sold. I would
expect to see stronger prices in future as the positives of Barangaroo outweigh the negatives and buyers will see
value. There is wide range of square metre rates which is directly related to whether the apartments face east
or west or a mixture of the two.
Portico has one of lowest CAGA figures for apartment sales in 2014 and 2015 that individually range from 0%
to 5% with the majority between 2 – 3%. I imagine from a vendor’s perspective the figures will be surprising,
perhaps a little disappointing; on the upside due to the fact that growth has been so subdued means this
building will be one to watch in the future. Portico’s location cannot be questioned being so close to the CBD
plus there is a wide square metre gap between Portico and other developments close by so I think more buyers
will find Portico attractive in 2016.
The best performers for 2015 in the northern end of the CBD based on CAGA were both Highgate and Observatory
Tower with an average annual growth rate of 6.33% which considering these are older developments illustrates
that quality developments with views are always going to attract buyers.