The Olympian picking budget’s boon for Sydney property

Article by: Matthew Cranston | AFR Weekend

Olympian Ed Fernon at the former Katoomba Golf Course, Blue Mountains

The Blue Mountains might sound like a pretty isolated place to park money for property investment but 29- year-old Olympian Edward Fernon has just taken the risk expecting several measures in the federal budget, as well as the drift of home buyers further west, to help drive house prices there.

Mr Fernon, who was Australia’s male representative in Modern Pentathlon at the London Olympics, has just bought a golf clubhouse and a chunk of land for a 24-townhouse development at Katoomba from a company that had been in receivership.

“We are really excited by the budget because we think it will help make the townhouses we are selling more attractive to downsizers,” Mr Fernon said. “Downsizers can sell their family for $2 million in Sydney then purchase a townhouse in Katoomba as well as a unit in Sydney and still put $300,000 into super.”

The downsizer measure, that had been widely mooted before Tuesday’s budget announcement, was not the only reason Mr Fernon and his investment partners snapped up the property through agents Stonebridge for a price well below replacement cost (the clubhouse alone had been built at a cost of $5 million).

“The property market here has been one of the best performers especially with the discussion around the new airport. We think the new airport will increase employment in the area plus provide a link to support further tourism.”

The federal government declared it would go it alone and build the multibillion-dollar Western Sydney Airport at Badgerys Creek, sending land prices higher.

“I am taking the risk because I think this area is going to be one of the best performing in Sydney,” Mr Fernon said.

Katoomba Golf Course, Escarpments Estate

It might be hard to keep up expectations – the Blue Mountains saw house price growth last year of 14 per cent and has enjoyed 70.6 per cent growth over the past five years.

But Mr Fernon picked the growth in Western Sydney early.

“When I came home from London I wanted to make some money so I bought several blocks in Penrith under option. They have since been rezoned and the prices have gone higher.”

“I knew that in 2013, when Sydney house prices took off, the natural progression would be that people just get squeezed and have to move further west.”

It helps that Katoomba was listed as the main centre for the Blue Mountains in the Draft West District Plan that formed a part of the Six District Plan released by the Greater Sydney Commission this year.

Domain chief economist Andrew Wilson said the planned airport would be one of the key value drivers and that Mr Fernon’s bet on downsizers could be well founded.

“There are lifestyle drivers there as well and some downsizers too,” Mr Wilson said, “But there is, of course, the never-ending search for value in Sydney.”