Surry Hills is still experiencing strong demand with the potential for property prices to keep rising

IT HAS come a long way from its industrial past but Surry Hills may still have further to go with property prices expected to continue to climb as more residential developments appear.

IT was once an industrial hub filled with warehouses and factories but now Surry Hills has been transformed into a gentrified suburb where property prices continue to soar.

Over the past five years, the median house price in the suburb has risen 65.6 per cent according to CoreLogic figures. In that same time, unit prices have grown 40.2 per cent.

Despite reports that the market may be softening, increased development in the area and a high level of demand are still pushing prices up.

Over the past three months house prices have increased a healthy 4.7 per cent and now have a median price of $1.5375 million. Units have climbed 2 per cent and now have a median of $750,000.

He likes the suburb because of its convenience.

Belle Property Surry Hills selling agent Leon Parker said he was expecting to see Surry Hills continue its strong performance.

“Two-and-a-half years ago we thought it peaked but it kept going,” Mr Parker said.

“Stocks down and very low at the moment and that’s what’s still driving these strong prices.”

“There is a bit more supply coming through with new development, but I don’t think it will pull the market back in any sense, especially with the Surry Hills market being so vibrant and in close proximity to everything,” he said.

Mr Parker said the suburb lured developers to the area because of its proximity to the CBD and the high demand from buyers looking for convenience.

Frank Colubriale bought his one-bedroom unit in the Excelsior building on Elizabeth St for $827,000 in July.

He had considered Potts Point and Woolloomooloo before settling on Surry Hills.

“What sold Surry Hills to me were the cafes and that it felt homely and fun. Potts Point was a little sterile,” Mr Colubriale said.

Frank Colubriale bought a one-bedroom apartment in Surry Hills.

“The area has so much to offer. There are different cafes, different restaurants and people from all walks of life. There are students who want to live close to the university, young professionals like myself who want to be in walking distance to work and there are retired couples.”

“With Surry Hills the profile of the area has increased. You have the Hutch & Hutch and Golf House developments and the price of those are attracting professional couples and families,” he said.

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Other developments that have sprung up across the suburb include The Pelican on Pelican St, The Foveaux on Foveaux St, Griffiths Teas on Wentworth Ave and SoHo on Elizabeth St.

However, some developments are already experiencing resales before completion.

Hutch & Hutch Surry Hills is set to be built at 26-34 Hutchinson St.

A one-bedroom apartment in the Griffiths Tea building is back on the market while in the Soho complex, a one-bedroom apartment is back on the market for $750,000.

Both projects have expected completion dates in the first quarter of 2017.

Anthony Andreatta of BridgeLane, the developers behind Hutch & Hutch on Hutchinson St, said they had specifically targeted Surry Hills when they were searching for their next building site.

“It’s an area with low levels of supply. If you can find a site in the area it is generally always well received. Some examples are Griffiths Tea and No. 1 Lacey, this was a smaller version of those,” Mr Andreatta said.

The project which launched on the first weekend of October saw 14 of its 18 properties snapped up with at least two buyers fighting for each apartment.

Mr Andreatta said Surry Hills still had plenty more price growth left in it.

The developers chose Surry Hills because of its potential.

“Surry Hills is going to continue to grow from strength to strength and with council now restricting residential development in the CBD it means areas on the outskirts, like Surry Hills and Darlinghurst, are becoming more valued.”