Do strata rates get more expensive near the Sydney CBD?

Property owners would know how strata rates increase the nearer the property is to the Sydney CBD…but is this actually true?

Primary research conducted by 37 Property Group investigated the link between distance to the Sydney CBD and the amount required to pay in strata rates.

The variables chosen to keep constant have been the number of bedrooms and car parking spaces. 2 bedroom apartments with 1 car space has been chosen as the key analysis as these are one of the most common structures within apartment buildings around Sydney.

The research reveals from over 100 properties surveyed within 50km to the city centre that the average strata rates paid by residents in the Sydney CBD are the highest. The average strata rate paid by residents is around $2,050 per quarter with the median strata rate at $1,950 per quarter.

A decline in strata rates is seen within 5km to the Sydney CBD in suburbs such as Neutral Bay, Balmain Surry Hills and North Sydney with the average strata rate paid by residents or investors at almost $1,150 per quarter and a median rate of $1,150 per quarter.

This decline continues 10km from the Sydney CBD in suburbs such as Maroubra, Botany, Chatswood, Bondi, Wolli Creek, Croydon, Canterbury and Strathfield. The average strata rate paid is almost $900 per quarter with the median rate at $750 per quarter.

The strata rate becomes fairly constant within 20km from the Sydney CBD in suburbs such as Epping, Freshwater, Dee Why, Manly, Killara and Auburn. The average strata rate paid is almost $850 per quarter with the median rate nearing $850 per quarter.

This constant pattern continues 30km from the Sydney CBD in suburbs such as Newport, Castle Hill, Caringbah, Sutherland and Hornsby. Average strata rates are nearing $950 per quarter with the median rate at $850 per quarter.

Strata rates decline 40km from the Sydney CBD in suburbs such as St Marys, Liverpool and Blacktown. The average strata rate paid by investors or residents is $650 per quarter with the median strata rate at $650 per quarter.

The general trend of decline continues 50km from the Sydney CBD in suburbs such as Mount Druitt and Penrith. The average strata rate paid by investors or residents is $550 per quarter with the median strata rate at $520 per quarter.

Average Strata Rates ($) per Quarter

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Median Strata Rates ($) per Quarter

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The key factors influencing increased strata rates:

1. Amenities
Properties nearer to the city have more amenities such as pools, gyms, saunas and lifts. This leads to higher maintenance costs to keep them in high quality working order. Higher quality property typically attracts wealthy owners or tenants who demand such amenities.

2. Larger Buildings
The bigger the building typically the higher the strata rates as greater electricity charges and car parking maintenance is required.

3. Land Values
Land values are at their highest in the Sydney CBD causing scarce land resources resulting in higher density.

4. Purchase Price
Following on from land values, properties in the Sydney CBD are comparatively more expensive than those in areas like Mount Druitt. In turn there seems to be some degree of correlation between prices and strata rates.