One of the great legends of the submarine raid is the crash of house prices which followed it in Sydney’s harbourside suburbs. While researching this book, the author was repeatedly told about an uncle/cousin/neighbour/grandparent who knew of a house sold for £25 in Rose Bay in the days immediately after the shelling of that suburb. Urban myth. It never happened. However, there was some genuine if brief impact on house prices, and some genuine action from people who saw the raid as the possible forerunner of an invasion.The reality is that a lot of people had already made plans to get out of the cities and into the country if ever the Japanese arrived, and the shelling of Sydney’s suburbs made these plans seem more urgent. In particular, people looked to the Blue Mountains, an hour’s drive west of Sydney, for sanctuary.Why they would do this remains a mystery to the author. It hardly seems likely that the Japanese, having taken the trouble to invade Sydney, would lose heart 50 kilometres inland and leave the rest of the country to its own devices. It is fair to acknowledge, however, that the genteel mountain hideaways of Leura and Katoomba would be unlikely to suffer the kind of heavy bombing and shelling which Sydney could expect if the Japanese arrived in serious numbers.
So what actually happened? The classified advertising section of the Saturday edition of the Sydney Morning Herald is the traditional bulletin board for Sydneysiders wishing to sell anything, from their car to their house. If there were a property crash, it would be evident here. A host of new properties would appear on the market, average prices would plummet, and the scent of desperation would be strong in the air. An examination of the Herald’s advertisements for ‘Flats, Residential’ and ‘Houses, Land for Sale’ in the weeks before and after the raid tells the story, and punctures the myth.
On Saturday, 30 May, the day before the raid, there were 26 flats advertised in the Herald with Rose Bay addresses, and four houses.The rentals for the flats were generally between £2 and £3 a week.The four houses ranged in price from £1050 for a brick cottage with four rooms and a tiled bathroom to £2100 for a modern bungalow with two bedrooms, sunroom, lounge, dining room, hot water service, refrigerator and harbour views. No price was given for a rather more splendid gent’s new residence in Wallangra Road, Rose Bay Heights, with four bedrooms, three reception rooms, two bathrooms, three toilets, a ballroom and a double garage.The Herald also carried a ‘Houses and Land Wanted’ advertising section, and Rose Bay appeared there once: a cash buyer was willing to pay up to £3000 for a cottage or bungalow, new or old, in Rose Bay Heights.
So how were house prices two weeks later, on 13 June, when the submarines had been and gone and the shells had fallen all around? The number of Rose Bay flats on offer had fallen slightly from 26 to 21. Rentals stayed between £2 and £3 a week. No houses were offered for sale in Rose Bay. However, in ‘Houses and Land Wanted’ there was one buyer offering up to £3000 for a four-bedroom modern home in Rose Bay Heights. In other words, no change.
A week later there was some sign of movement. On 20 June the Herald listed 25 flats in Rose Bay.This time the cheapest was £1.12.6 a week, down from the £2 lowest price of the week before.There were only two houses for sale, including the gent’s residence in Wallangra Road, still unpriced. However, a tone of mild hysteria crept into the wording of the second ad.‘Rose Bay, convenient Tram, Bus and Shops’, it began enticingly. ‘Commodious bungalow home, 3 reception rooms, 4 bedrooms, all conveniences, Refrigerator, Garage. The OWNER is a GENUINE SELLER and is prepared to SACRIFICE for a QUICK SALE. PRICE £2200 or near offer.’
By the following week, GENUINE SELLER had to face the fact that he was in trouble. His price dropped to £1930 or near offer. There were now six houses for sale in Rose Bay, the largest number yet.The prices were: £1030, £1450, £2330, £2330, £3100 and GENUINE SELLER’s £1930. Far from dropping, the average price had actually risen microscopically, whatever the travails of GENUINE SELLER.The only real change was in flat rentals. Flats could now be had for as little as £1.10.0 a week, a 25 per cent drop from the £2 minimum before the attack.
This pattern continued through July and into August. GENUINE SELLER appeared for the final time on 4 July with the price still set at £1930 or near offer. He dropped out of the running on 11 July, presumably because he had genuinely sold. By the end of August it was all over.After the Battle of Midway, the threat of Japanese invasion had evaporated, and the threat of further attacks on Sydney had diminished to vanishing point. Property prices, whether for sale or rental, were emphatically back to pre-attack levels. Instead, the myth of the property crash became part of estate agents’ hype. On 8 August the Herald carried an ad for a Rose Bay property: ‘Pair maisonettes £4350 sacrificed hundreds below cost. Brand new ultra-modern home and investment combined. Beautiful texture brick building, each home contains two reception, 3 b’rooms, beautiful Modern Bathroom, Shower Recess, sep toilet, h.w. service throughout. Garage.’
As readers can judge for themselves, it was offered for about the same price as it would have fetched on 30 May, before the subs came. On 15 August the Herald carried a similar advertisement for a two-storey home in Rose Bay Heights priced at £2800.The ad was placed by the Laton Smith estate agency and declared: ‘It’s seldom we are privileged to offer a home of this quality at this price.’ Again, the price was no different from the pre-raid price. By 22 August landlords were asking £3.7.6 a week for flats. It was business as usual, if not better than usual.
David Goldstone was a seven-year-old schoolboy living in a block of flats in Old South Head Road near the corner of O’Sullivan Road, Rose Bay. O’Sullivan Road runs parallel to and one block away from Balfour Road, which was hit by two of the I-24’s shells. One of the Balfour Road shells exploded, seriously damaging a house and injuring a sleeping woman with flying glass. So the Goldstone family lived pretty much on the front line.
David attended the nearby Scots College, one of Sydney’s eight elite GPS schools, as a day boy. Scots had a country campus near the town of Bathurst, about 150 kilometres west of Sydney. In David’s words, his parents did ‘a minor flip’.They rapidly switched young David from day boy to boarder, and packed him off to the country campus.‘I was pretty upset about it,’ he recalls. ‘I wanted to know were my friends coming with me. Of course, they weren’t.’ The whole experience left him scarred to this day: he still can’t bear the taste of rhubarb. ‘They had fields full of rhubarb,’ he recalls.‘They gave it to us for breakfast, lunch and dinner.’
By the end of the year, the Goldstone parents were confident the invasion threat was over. The Australian school year begins in January, not September. When the new school year started in January 1943, David was back to the Sydney campus of Scots College as a day boy, with the menace of both invasion and rhubarb now a thing of the past.
To his huge relief, everything in Sydney was as he had left it.The same families lived in the same blocks of flats. His friends hadn’t moved. Life could get back to normal.
However, whole families did at least lay plans to move. Donald Dunkley remembers:
A lot of families were ready to go to relatives up in the country. If an invasion actually did take place,we had some relatives living in Harden, the Riverina part of New South Wales. We were advised to contact relatives in the country and see if they were willing to take us if we had to evacuate.They said yes, by all means, we’re happy to take you. So, had there been an invasion, I don’t know how on earth we would have got there, but we did have this place earmarked that we could have gone to.
I think a lot of other families around the place had relatives in the country, and they were all ready to go if necessary.
Did he have any friends or neighbours who actually moved as a result of the raid? ‘I don’t know of any.’
The raid did produce one bizarre scramble. Jim Macken’s ability to bob up in unexpected places in this narrative will now be apparent from his Riverview and missing submarine contributions. His final appearance in the story flows from the fact that, at the time of the submarine raid, his father managed the fashionable Hydro-Majestic Hotel in the Blue Mountains near Leura, 100 kilometres west of Sydney.
He recalls:
I was living at the Hydro with my father and family. He’d been deluged with phone calls from people wanting permanent bookings at the hotel for the duration of the war. He said, we’re not doing it because it would preclude ex-servicemen from coming up here. We don’t want permanent bookings. We’re looking after people who want a holiday. So he knocked them all back with one exception, a man who’d been there before the war, an old colonel who’d been a permanent resident before 1939.
None of this rush for permanent bookings happened before the submarine attack. The submarines and the shelling of Sydney’s eastern suburbs triggered it off.Why did people want to move into the Hydro-Majestic?
They all wanted to get out of Sydney.They wanted to rent their houses, or try to sell their houses. But houses were very hard to sell.They wanted to get out of what they saw as the danger area in Sydney. Although they couldn’t get to the Hydro, they were buying houses up all over the Blue Mountains.
It petered out after a while.After Midway and the Coral Sea the panic went out, and people stopped buying and went back home. The fear of a Japanese land invasion faded.
So what is the reality of the Great Sydney Harbourside Property Crash? The core truth is that it never happened. Property prices trembled for about eight weeks, and a few people saved 10 shillings a week—$26 a week in today’s money—on the rent they might otherwise have paid if the subs had not come. But there was no rush, no widespread panic selling, and certainly nobody bought a house in Rose Bay for £25.
Finally, there is an unpleasant little lie which needs to be held up to the light and then stomped on and consigned permanently to the rubbish bin. A lot of the stories of the property price crash and the subsequent rush for bargains are told by anti-Semites. The eastern suburbs of Sydney have always been attractive to Sydney’s Jewish population, just as they are attractive to the goyim. It’s as nice a place to live as you would find anywhere in the world. The legend would have you believe that jittery gentiles sold their houses off cheap, and the Jews craftily bought them up at bargain prices. That, says the legend, is why there are so many Jews in Sydney’s eastern suburbs today.
It is the purest claptrap.Apart from the non-existence of the property crash, so that there were no bargains to be had anyway, there is no evidence that the mix of population in Sydney’s Eastern Suburbs altered one jot after the raid. The truth is that most families were in the same houses and flats six months after the raid as they were before the subs and the shells arrived. Ask David Goldstone.