Sydney property hot spots

A quality one-bedroom unit near public transport in the inner eastern suburbs is currently the best investment, says Knight Frank's Clint Willoughby. As single-person households are now in the majority in Sydney, demand for one-bedroom units has outstripped demand for the more traditional two-bedroom family dwelling.

Proximity to major infrastructure developments, such as freeways, rail/bus links, schools/universities, hospitals and shopping centres, are pointers to future “hot spots”. Mr Willoughby says that Darlinghurst and Broadway/Ultimo will be such areas over the next decade. They're close to the CBD, transport, restaurants and shops, educational, leisure and sporting facilities. Areas bordering the Parramatta-to-Chatswood rail link, such as North Ryde and Lane Cove, will also grow in value as the rail link will reduce traffic flow in the area.

With rising interest rates and an end to the first homebuyers' grant, an easing in Sydney's property market growth is expected in 2002 as supply increasingly outweighs demand. As interest rates rise, some borrowers will be forced to sell up, adding to the problem.

Go to our Rate Watch section for the latest information on interest rates.