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Here comes the next wave
Author: Susan Wellings
Date: March 29, 2008
Publication: Sydney Morning Herald (subscribe)
It was once a haven for beach shacks and 1960s apartment buildings. But now large tracts of Sydney's northern beaches are about to undergo a modern makeover, with a number of large apartment mixed-use developments being planned for the area.
And while they are sparking controversy among some, others believe it's exactly what the region needs: new medium-density housing close to fresh commercial, retail and community facilities.
"They say Sydney is one of the best cities in the world," says Matt Brady, of PRDnationwide at Seaforth, which has just produced a major new report on the northern beaches. "At the same time, the northern beaches is one of the best places to live in Sydney.
"So it's only right that at last we're getting some development, since there's such a shortage of stock here compared with the numbers of people who'd love to be able to move here."
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Growth in numbers
There are lots of big new developments either under way or on the drawing board for the area stretching from Sydney Harbour in the south to Narrabeen Lakes in the north.
The most contentious is a $100 million plan by Multiplex currently before Warringah Council to develop a site in Dee Why with between 400 and 600 residential apartments, with 1120 square metres of commercial space, 1400 square metres of retail space, a library and community centre.
"This involves two parcels of land and two towers of up to 20 storeys," says Malcolm Ryan, the council's director of planning and development servicess. "We've been in a bit of a hiatus after a lot of flats were built up to five or six years ago in Collaroy, and the economy slowed up and our supply of land slowed up. Now we're seeing a rise in the level of activity again."
The development is in line with the NSW Government's metropolitan strategy to provide more housing and other amenities for the area. "We're still working out the mix of design but it's going to be a real lifestyle precinct and we feel it will prove very, very popular," says Kevin Driscoll, Multiplex's head of apartment sales.
"[The northern beaches area] is a very desirable place to live because it's so close to the beach and it's a fantastic spot and there's a real demand for fresh development and housing."
Just along Pittwater Road, another large project - this time already under construction - is the redevelopment of the Dee Why Hotel site, to include 163 apartments, a supermarket, the redesigned hotel and commercial offices. It's due for completion in November next year. At 10,500 square metres, incorporating two residential towers of seven storeys and one five-storey commercial building, it's the largest development in the area for many years.
The area is quite desirable "and this is a unique mixed development," says Tony Bellingham of developer Murlan, working in conjunction with Bayfield Hotels.
"It'll provide people with the ability to live, work and play all within close proximity to each other, yet still be close to the beach. For this area, it's the first development of its kind. This is the beginning of the gentrification of the area."
Developer Stockland is also busy with an $87 million redevelopment of the old Totem Shopping Centre site in Balgowlah, with 235 apartments in seven buildings ranging in height from four to eight storeys, plus 25 townhouses, a supermarket and 50 specialty shops. The Village, Balgowlah, has been designed by architects Allen Jack & Cottier, and is due to come on the market in May.
In Manly there's the $142 million St Patrick's Estate development: Lend Lease recently completing 44 apartments and 16 strata townhouses at Cerretti Crescent, with some still for sale. Mornington is a new complex under way for the over-55s at Mona Vale, overlooking Bayview golf course, with completion due in October.
At Narrabeen Beach there are 18 new terrace homes, Reflections, developed by the AEH Group and Playoust Churcher Architects.
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Growth in price
The drivers for all the development have been the predicted rise in population and the recovering price of apartments.
According to Census data, the total population of the lower northern beaches is 170,947, spread over the local government areas of Manly and Warringah. That's forecast to grow at an average rate of 0.2 per cent a year over the next 25 years, to reach 186,500 in 2031.
As a consequence, the number of medium to high-density residential developments has been slowly increasing over the past five years, the new PRDnationwide report says, to the point where units and townhouses make up 43 per cent of dwellings.
Their median price has been growing steadily, too. Between 2000 and 2003 the median unit price leapt 12.3 per cent from $309,000 to $438,000, while last year there was a steady 2.2 per cent price growth, leaving the median at $455,000. Rents also have been strong.
"The highest demand, and rental growth in the region, was for two-bedroom apartments, which saw the median rental rate increase by 9.9 per cent to $420 a week," says PRD's NSW research analyst, Matthew Tiller. "Based on the median unit price and the median weekly rental rate, the average gross rental yield for units on the lower northern beaches was 4.8 per cent [for the year to last September]."
Tim Lawless, the residential research director for RP Data, agrees the area has great prospects for buyers.
"The strong performance runs in parallel with other inner-city and metro coastal locations around Sydney such as the eastern suburbs, inner Sydney and central northern Sydney, which have all returned capital growth rates of at least 14 per cent over the last year," he says.
"From a unit market perspective the stand-out suburbs have all been located along the coastline, with median prices in Queenscliff increasing by 14.7 per cent over the last year to reach $530,000 and Dee Why reaching a median price of $395,000."
The new large-scale developments are likely to make much more choice available for consumers. "This sort of development is new for the northern beaches," says Stephen Doyle, principal of Doyle Spillane in Dee Why. "They're going to really revitalise the area."
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Hooked on the beaches
Surfing, the beach, cafes - the northern beaches has it all, believes Mercedes salesman James van de Scheur.
The only thing it now needs is a few more newly built luxury apartments for sale.
"I've been looking to buy one for about a year now," says van de Scheur, 32, who lives in an older-style apartment at Narrabeen. "There aren't too many around, but I'm much more hopeful for the future."
Van de Scheur, who has lived by the beach for 10 years since moving from the Hunter Valley, says he wouldn't consider trying another area.
"The environment is so laid-back here, I love it," he says. "It's got great cafes, good surfing, nice beaches and - if you go further north - there are lakes and fishing and the chance to go for a sail. I'd like to buy a newer apartment, as I like new things, and hopefully there will soon be more opportunities."
Prices and strata levies are still to be set. Contact developer Murlan, 9552 1400.