Let me give and example. Heavily influenced by Chinese buyers, freestanding Strathfield houses are now commanding $4.5m – $5.0m at auction. This is now the same price for a substantial and well located house on the Lower North Shore. Historically the Lower North Shore has delivered far superior capital growth over time. Highlighting an even greater disparity, $4.5m – $5.0m will buy a trophy house on Sydney’s Northern Beaches. Again capital growth in this area has dramatically outstripped that of the Strathfield area over the longer term time horizons.
So what’s at play here? Well clearly some suburbs more heavily influenced by Chinese investment have become way too expensive while several prestige suburbs not on the Chinese radar have lagged. Now relativity trades aren’t for everyone. Firstly you have to be able to relocate and that has implications for school and work. But that said, I know where I’d rather park $4.5m into a long-term property play.