Paddington Buyer Guide – Part 1
Zones and Land Sizes
2-part blog series
I often hear the Eastern Suburbs referred to as though it is one homogenous suburb that goes up or down in unison. In reality, the various suburbs that make up the overall Eastern Suburbs are a bit like scrambled eggs – lumpy and smooth in different areas as far as rental and sales performance, number of sales, and affordability are concerned.
The beaches have their seasonal price movements and vagaries with distance from the beach one example, while the harbour eastern suburbs are different again. When you drill down into a specific suburb, there are different pricing models applied. Today we discuss Paddington terraces, with some recently-sold properties as examples.
As a Buyer’s Agent, clients want us to buy at less than the market price, may pay on the money, but only pay over the expected price with competition and rareness. So, what is actually the price? Ignoring the fact that it is money paid for a property, I see it as a contrast, i.e. how close is it to something we know the value of, or is it a full contrast and totally different, or somewhere in-between?
When looking to value a property, we don’t randomly pick a price we think someone will pay, we look at comparative market analysis for similar properties, and compare the subject property to see if it is superior or inferior, and by how much. This leads us to the relativity of the property against everything else out there.
When valuing a property, I look at it and compare it with recent sales, taking zone/location, land size and other factors into account. It is then necessary to overlay supply and demand with rare sought-after properties commanding a premium and the run of the mill properties at the lower end of the pricing. The third step is to consider the previous prices paid as the purchaser may have paid too much or got a bargain, which shouldn’t impact the most recent price.
Zone or location within the suburb
The difference between the four main zones in Paddington has diminished slightly in recent years, but there is still a marked difference. The Woollahra end includes the eastern parts of Paddington, Windsor and Sutherland Streets from Oxford St down to below the Four in Hand pub.
Five Ways zone includes up the Hill above the London Pub down to Trumper Park, and West to beyond the redeveloped Hospital for Women. ‘The other side’ stretches from the main Centennial Park Gate at top of Moore park Rd all the way down to South Dowling St, and the Rushcutters Bay end of Paddington along Boundary St.
If looking in the SCG side of Paddington I hear buyers saying ‘that property would be worth $2m more if it were near Five Ways or Queen St, Woollahra’. It may be, but this is an example of contrast. Buyers do look at the SCG area as it may be cheaper, but conversely many buy there on purpose because of its proximity to Centennial Park and is close to the main roads that offer easy access to and from Paddington.
An incredibly well-renovated, architecturally-designed beautiful home is for sale at 27 Regent St Paddington through Ben Collier. Exquisite doesn’t come close when describing the design and quality of this home and the price is set appropriately higher than a regular terrace nearby.
As there are no comparable sales in this area, I need to compare to the Woollahra part of Paddington or above Five Ways to find similar-sized properties. The price is set lower than if a similar property were for sale in the more glamorous part of Paddington, but I also need to compare whether I would trade the amazing property itself for a lesser property for the same price in a ‘better’ location.
This is where the contrast comes, in with buyers all having different motivations and opinions. Personally, this home was so beautiful I would live there and walk the 600m to Five Ways if it was a priority. Everyone has different priorities, and this helps set the relativity. 27 Regent St is a stand-out, as a typical terrace in this area is cheaper than Five Ways even if on similar land sizes and renovated equally.
The four zones vary not just in their physical location, but also in land size, size of the terrace itself, and frontage. There is a complex formula applied when contrasting various terraces and deciding on a sales price which takes all factors into account to some degree.
In Part 2 of this blog series, we will go on to consider how these factors impact on sales price, in combination with design, views/aspect, and car parking, which is at a premium in Paddington.