THE 30 MINUTE TEST

At Charles+Stuart we have long marketed and managed properties across Sydney – and the inner west are two areas we know very well and have watched grow in popularity over the years.  The infrastructure and amenities and proximity to the CBD are major drawcards to owner occupiers, investors and tenants – and that’s been borne out by a recent study by the Committee for Sydney and PwC.

The Geography of Time: Mapping Sydney’s effective job and service density report looked into which areas of Sydney reach the most places of employment, retail outlets and social services in the shortest time using different modes of transport. It also took into account house prices to find the “best value” accessible suburbs in the city.

Six of the top 10 suburbs on the list were in the inner west, with Ashfield topping the rankings, followed by Sydenham–Tempe, and Burwood-Croydon. Also on the above average list are Redfern– Chippendale, Petersham–Stanmore, Newtown–Camperdown, and Surry Hills.

The benefits are many, the report revealed. “People, freed from the commute, start spending their time budget on other things. They see more friends and spend more time with family. They invest more time on education, leisure or keeping fit. They take the job that makes them feel more satisfied and stimulated. They become more productive. This city, the 30-Minute City, has more social cohesion, stronger social capital and a happier, healthier population.”

In an interview with the Sydney Morning Herald, the report’s co-author, Eamon Waterford, the Committee for Sydney’s director of policy, said the study showed rail was “still king” in Sydney.

“You just can’t beat being close to a good train station,” he said. “The reality is that in peak hour on a weekday morning you can’t get very far in 30 minutes in a car but you can get a very long way on a train.”

The study used a variety of sources including Google data on travel times, enabling the team to evaluate the number of jobs and services accessible by car and public transport. It compared how easy it was to travel to jobs on weekdays at 8am. And it found that middle-ring suburbs including Homebush, Concord West-North Strathfield, Punchbowl, Revesby and St Ives were the most affected by peak-hour traffic congestion.

Those living on the outer edges of Sydney had the worst access to employment, with only 10 per cent of jobs able to be reached within a 30-minute commute on a weekday morning.

Our politicians have promoted the benefits of a 30-minute city. Prime Minister Malcolm Turnbull spoke about it in explaining his approach to cities and urban transport, while Labor’s Anthony Albanese, the shadow minister for transport and infrastructure, talked about the idea back in 2014.

In announcing his “Smart Cities” plan in May last year, the PM hinted at a utopian urban and suburban future, with congestion-free commutes lasting no more than 30 minutes home to work to play and anywhere else we need to be during the day. And that’s the concept that’s changing (or may change… or not…) how our cities and suburbs are planned and built and how and where we work and live.

But the 30-Minute City is still a dream for many, as the report stated: “Sydney is home to over 2 million jobs, containing approximately one fifth of all of Australia’s employment, however, the 30-Minute City is not yet a reality for all Sydneysiders.”

SYDNEY'S HOUSING MARKET: WHAT LIES AHEAD?

There’ve been plenty of pundits forecasting what the booming Sydney property market is going to do and now global ratings agency Standard and Poor’s (S&P) has weighed into the debate, warning that the market is due for a “sharp correction”.

For the past five years, Sydney’s home prices have been growing at an average of more than 10 per cent a year. The median house price is now around $1 million.

However, the constant rise in Australian house prices combined with high levels of private sector debt has prompted S&P’s view that the market may be about to hit its peak. The agency has forecast that private sector debt will rise to about 136 per cent of gross domestic product in June, up from 117 per cent in 2013. Currently Australia’s household debt is $2.1 trillion, and around 80 per cent of that is in mortgages.

In its report, S&P said: “We believe the risk of a sharp correction in property prices has increased. We believe financial institutions operating in Australia now face an increased risk of a sharp correction in property prices and, if that were to occur, a significant rise in credit losses.”

If the “downside scenario” were to occur, all financial institutions in Australia are likely to incur significantly greater credit losses than at present, the agency said in a statement.

In light of this, S&P downgraded the credit ratings of 23 Australian financial institutions, although the Big Four – ANZ, Commonwealth, Westpac and NAB – were exempted, on the assumption that the federal government would step in to provide support if needed.

A “cooling off” – not a major correction

Despite the warning shot over the bow by S&P, Sydney’s market is still performing well. While property prices eased off towards the end of May, they were still up 11 per cent on the same time last year.

According to the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast, Australia’s housing markets are expected to cool from 2018 for a few years. The forecast is for a small fall of 0.6 per cent nationally next year, with Sydney easing off 1.4% in 2017 and then another 0.9 per cent in 2019.

Moody’s Analytics economist Emily Dabbs told The Sydney Morning Herald that Sydney prices are set for a minor correction. “Although we do not expect a steel decline in prices, Sydney’s property market will likely stagnate through to 2020 as interest rates begin to normalise,” she said. “The degree of correction will likely be uniform across apartments and detached houses.”

Given Sydney’s house prices has risen by more than 100 per cent since 2009, an easing off of that degree isn’t the cause for alarm that some doomsayers have been touting.