Randwick the surprise Sydney suburb in world's top 10 for wealthy property buyers

An unexpected Sydney suburb has joined the ranks of 10 hand-selected global locations likely to attract the world’s wealthiest eager to buy real estate, a report released on Wednesday revealed.

Along with areas as diverse as Vancouver’s South Main, Berlin’s Mediaspree and Shanghai’s ZhangJiang, it was Randwick in Sydney’s inner east chosen as a neighbourhood where property is poised to outperform the rest of the city, Knight Frank’s Wealth Report 2017 found.

Knight Frank Australia head of residential research Michelle Ciesielski picked the eastern suburbs’ health and education hub as the top location of choice for growth over the next five to 10 years for the world’s top earners.

“The suburb of Randwick has seen a lack of new supply over the past five years, with less than 1000 higher density apartments being built, pushing up median values and rents in the suburb,” Ms Ciesielski said.

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The area has major attractions for ultra-high-net-worth individuals (UHNWIs) – defined as those with a net worth over US$30 million ($39 million) excluding their primary residence – which will exacerbate the shortage.

Local infrastructure and transport projects boosted the area onto the top 10 list, with the South East Light Rail under construction and regeneration under way, including upgrades to the Prince of Wales hospital.

Already, the area has been “aspirational” for UHNWIs to be near the Royal Randwick Racecourse, Lakes Golf Club, Centennial Park and in close proximity to universities for their children.

“This new infrastructure and transport proposed in Randwick, along with increased employment opportunities and strong population continuing to grow throughout Sydney, the additional 1000 apartments projected to be built over the next five years in Randwick will fall short to meet the ultra-wealthy demand in this neighbourhood.”

The group of cashed-up international buyers typically target properties in the top 5 per cent price bracket in a market, known as prime real estate, the report said.

Already, Domain Group data records the median house price in Randwick at $2.3 million. And the median apartment price, of about $850,000, will also be pushed “significantly higher,” Ms Ciesielski said. About 70 per cent of homes in Randwick are apartments.

But even with this surge in international interest anticipated, there has already been an increase in local buyers looking to get a foothold in the area.

Laing + Simmons Randwick principal Alex Udler has sold homes in a matter of days in 2017, as home buyers swoop on an area that has a massive supply shortage.

In February, a four-bedroom terrace at 117 Bundock Street sold for $2.27 million and a three-bedroom apartment at 12/76 Wentworth Street sold for $1.38 million.

A five-bedroom terrace at 117 Bundock Street, Randwick, sold for $2.27 million after a week on the market in February. Photo: Laing + Simmons Randwick

“Randwick has always been popular among buyers, particularly owner-occupiers interested in perhaps the best connected address in the Eastern Suburbs. And with the Light Rail on its way, interest in Randwick and surrounding suburbs will only grow,” Mr Udler said.

“The issue is that demand will largely go unsatisfied. There’s a massive shortage of supply, especially quality new apartments, in the area.”

Propertybuyer chief executive Rich Harvey has seen increased levels of competition in Randwick and the eastern suburbs, and pointed to the light rail, shopping centre, universities, hospitals, access to main beaches and proximity to the city as top drivers behind its continued popularity.

Randwick was also seen as “cheaper compared to Queens Park or Centennial Park” with art deco blocks that were attractive to a local crowd, he said.

All of these factors had caused a “lack of supply relative to current demand”.

‘Neighbourhood watch’: The 10 top areas on the radar of the wealthy

1) East Guanggu, Wuhan – infrastructure and transport

​2) Dubai South, Dubai – infrastructure and transport

3) South Main, Vancouver – infrastructure and transport

4) North of Runda, Nairobi – infrastructure and transport

5) Randwick, Sydney – infrastructure and transport

6) Mediaspree, Berlin – technology and creative industries

7) Kamogawa River Area, Kyoto – technology and creative industries

8) Majiwada-Kasarvadavali, Thane, Mumbai – technology and creative industries

9) Tophane, Beyoglu, Istanbul – technology and creative industries

10) Zhangjiang, Shanghai – technology and creative industries

Source: Knight Frank, The Wealth Report 2017