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Market Watch: On the ground in the neighbouring Sydney suburbs undergoing immense change

Nestled in the heart of Sydney’s vibrant inner west, two neighbouring suburbs are a magnet for both first-home buyers and upsizers, with proximity to the CBD and a friendly village atmosphere making the area a desirable lifestyle destination.

Article published by Real Estate Group 17th March 2022.

With bigger blocks and a more affordable entry point than prime inner-west favourites like Balmain, Newtown, and Annandale, the booming ‘burbs of Petersham and Lewisham – which share a postcode – have ridden the recent property boom in impressive style. 

“They’ve been million-dollar suburbs for at least the past five years,” said Stone Real Estate Newtown agent Frederico Fraga-Matos. “Even entry-level homes are in the early millions.

“We’ve been seeing such a dramatic increase in prices across the board and this area is often overlooked. It doesn’t have a high turnover but people who are being priced out of neighbouring areas are considering Petersham and Lewisham because there’s more land and better value.”

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The median house price in Petersham is $1.93 million, a year-on-year rise of 15%, according to PropTrack data, with the median unit price of $758,125 showing a 24% increase. 

It’s a similar story in Lewisham, where the median house price is $1.81 million, up 27% year-on year, though the $780,000 unit median has declined by 7.8%. 

In Petersham, first-home buyers make up 57% of the market, with investors and other owner-occupiers accounting for 21% each. 

First-home buyers also rule in Lewisham, making up 42% of buyer activity, along with owner-occupiers at 38%.

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Mr Fraga-Matos said once buyers move in, they’re reluctant to leave, making it one of the most tightly held areas in the inner west.

“Most of the people who are moving here are young professionals,” he said. “They’re couples, singles, and young families and once they arrive, they really want to stay in the area.

“They may decide to upsize after three or five years, but they still look to remain here. It can be a challenge because it’s a small area and the turnover isn’t that high. Some people live here for 20, 30, or 40 years.”

With a rail line running through both suburbs, making the short 6km trip to the Sydney CBD an easy commute, the attraction for young professionals is obvious. 

But the area also offers plenty of cafes, restaurants, schools, and parks, and Petersham’s reputation as a hub for Sydney’s Portuguese community adds an extra vibrancy.

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Coffee aficionados gravitate to Brothers Ben and The Counter, while Fich and Noi are popular dining venues.

For a taste of Portuguese cuisine, there’s Sweet Belem for delicious tarts and Frangos for that famous Portuguese chicken.

“Most of the people who buy here already live in the inner-west,” said Mr Fraga-Matos. 

“There are also people who may have grown up in the eastern suburbs or the upper and lower north shore. A lot of people start out as renters wanting to be close to the city, but they fall in love with the lifestyle and decide to stay.

“People love the traditional inner west semis and terraces and freestanding homes as well. And there are also lots of character, art deco style apartments.”

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Some of Mr Fraga-Matos’s recent sales highlight those choices.

An older-style and unrenovated three-bedroom, one-bathroom home on 287sqm at 6 Ducros Street, Petersham, sold last December for $2.24 million. 

Although the original kitchen and bathroom were crying out for a makeover, the potential was obvious. 

“That was bought by first-home buyers, a young couple who had been renting in Drummoyne,” he said.

A renovated two-bedroom, one-bathroom semi on 123sqm at 32 Searl Street, Petersham, also sold in December for $1.5 million. 

It featured a cosy private courtyard while exposed brick interiors added plenty of character. 

“That went to a young couple buying their first home together who had been renting in Alexandria,” Mr Fraga-Matos said.

A two-level, two-bedroom terrace on 78sqm at 1 Elswick Street, Petersham, sold last November for $1.3 million to a young couple who had already been renting in the inner-west. There were scope for improvements and the home boasted a quiet street close to the station.

Another young couple who had been renting in Annandale bought a freestanding three-bedroom, one-bathroom cottage on 184sqm at 241 Corunna Road, Petersham, in November for $1.6 million. 

The recently refreshed home boasted light-filled interiors and even city skyline glimpses from its private rear deck. 

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The Petersham area is also attracting some new developments, aiding a process of gentrification that is seeing the look and feel of the suburb improve.

Work on the $132 million redevelopment of the Petersham RSL site is underway and when it’s completed, there will be 357 new apartments over three separate tracts of land adjacent to the railway station.

Stage one of The Siding project will also deliver a new single-storey 3500sqm RSL club within a new precinct that will feature a day spa, restaurants, cafes, rooftop terraces, and pocket parks, adding another tempting reason for people to make Petersham home. 

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