Raine & Horne

Making Real Money From Property

Written by Reuben Solomon

14 Jul 2010

Homes in suburbs with dirty little secrets can reap bigger profits than those in our most exclusive areas, writes Susan Wellings.

Sewage, rats, gang warfare, a tip, drugs, waste incinerators, social problems, flight paths above, coal deposits below, a freeway nearby and overseas forces ready to invade just over the horizon ... all anathema to lovers of good Sydney real estate.

But when a suburb finally overcomes the problems, and then the stigma, of any past dirty little secrets, the dividends can be huge.

In fact, you can make a packet more than in gold-plated suburbs. Prices in once-scungy, now-sexy Bondi Beach, for instance, have risen 128 per cent in the past 10 years and 130 per cent in still-tainted Redfern, whereas in Mosman prices have climbed only 84 per cent - and in Woollahra, 80 per cent.

"It's all about timing and identifying suburbs with potential and looking, critically, at convenience," says chief executive, Peter Hanscomb. "A suburb needs to have good transport or be close to the city, that's very important."

Domain took a look at suburbs that - despite their "dirty little secrets" - are on the rise.

BONDI BEACH

DIRTY LITTLE SECRET:

Sewage pipes at sea & backpackers.

WHO CARES?

The sea's now much cleaner and the beach as stunning as ever.

Sydney's ocean- and harbour-front were once bedevilled by fears of attack during World War II, with the added odour of poor sanitation leading to problems of rats and sewage in places such as Bondi and Clovelly, especially when pumped into the ocean close to the shore.

"When I first came here, Bondi Beach was pretty scungy," says Ruth Cohen, who 22 years ago bought her three-bedroom semi on Rickard Avenue for $330,000. Now in her 60s, she just sold before auction for more than $1.4 million.

"Now it's magic. It's a lot cleaner ... and there's less fear of things like needles on the beach."

In the past decade, Bondi's median house prices have risen from $570,000 to $1.3 million.

OUTLOOK

It will continue to grow, says the principal of buyers' agents Curtis Associates, Chris Curtis, because of its beach, its flatness, the fact the east-west streets give many homes a northern aspect and its family friendliness. Its major growth inhibitor is transport.

Source: domain.com.au