The booming Sydney suburbs and those set for take-off

A new analysis of Australia’s most expensive property market shows some Sydney suburbs - particularly at the affordable end of the market - have chalked up extraordinary home price growth just since the start of the year, despite subdued growth across the wider city.

It comes as a large brokerage firm has revealed the areas of Sydney it believes will continue to grow strongly over the next six months.

Huge price gains

CoreLogic data, analysed by the Domain team, has found that some suburbs in Western Sydney have recorded extremely strong house value growth in the past three months, while the prices of apartments in suburbs closer to the CBD have soared. 

Dwelling prices grew 8.7% in Sydney over the last year, according to CoreLogic.

However, the data analytics firm’s latest monthly Home Value Index shows growth slowed to just 1.1% across the city as a whole in the three months to the end of April, with high interest rates, cost-of-living pressures, and reduced borrowing capacity for potential homebuyers starting to bite.

Defying this trend were a number of markets in Sydney’s relatively affordable western suburbs where it’s possible to buy a house for well under the city’s median price of $1,421,413.

Leading the way with astounding 9% growth in the three months to April was Cabramatta West, followed closely by nearby Bonnyrigg Heights at 8.7%.

High up the list, with growth of just under 7% for the quarter were Tregear, Whalan and Emerton, where it’s possible to buy a house for about half the median Sydney price.

Laing+Simmons Mount Druitt & Rooty Hill principal Basel Nahas, who specialises in suburbs like Tregear and Whalan, told Domain the top factor driving prices in his area was buyers priced out of other areas.

“Buyers have no options but to buy in these suburbs that are left,” he said.

“That’s why you’re seeing these quarterly hikes in these suburbs because they are very affordable.”

Gordon, in the city’s north, was the only suburb in the top ten growth areas not in western Sydney.  

Bordered on two sides by national parks and near some of the city’s top schools, Gordon saw 7.1% growth over the three months to April, with the median house price coming in at an eye-watering $3,719,563. 

It was a different story when Domain analysed CoreLogic’s data for units.

Inner-city Chippendale (8.4%), Ultimo (7.2%) and Camperdown (7.1%) saw the most price growth in the quarter to April. 

Picton (6.7%), on Sydney’s south-western outskirts, was the only suburb in the top 20 for quarterly unit price growth that was not near the CBD or the city’s northern or eastern beaches. 

Three of the top 4 markets were suburbs cheaper than Sydney’s median unit price of $844,659.

Looking ahead

The Domain analysis comes as brokers Shore Financial have released their latest “State of Sydney Report”, which looks at house price trends across the harbour city.

Shore classifies Sydney’s 600 suburbs into 5 quintiles, based on median asking prices and identifies 5 suburbs in each category that it thinks will outperform the broader market over the next six months.

Standout suburbs in the affordable first quintile, which Shore describes as “Heartland Sydney” are all in Sydney’s west or north-west.

House prices in Kingswood, Werrington County, Bligh Park and Blacktown are all tipped to grow 4% in the next 6 months, with Whalan chalking up another 3% growth.

The standout suburbs in the second “Suburban Sydney” quintile are all in Sydney’s west or south-west.

Parramatta, Greystanes, Bonnyrigg, Lurnea and Regents Park are all tipped to experience house price growth of over 5% by December.

In the third quintile, which Shore Financial dubs “Rising Sydney”, house prices in Barden Ridge, Belfield, Rockdale, Normanhurst and Hurstville are all predicted to grow by more than 5% in the next six months.

All these suburbs have median home prices higher than the city-wide median.

“Professional Sydney” suburbs Dundas, Bella Vista, Frenchs Forest and Bilgola Plateau are all forecast to see house price growth of more than 5% over the next 6 months, while Woolooware in the city’s south is tipped to grow 4%.

Finally, in the top “Affluent Sydney” quintile, Lane Cove is predicted to see more than 5% growth in house prices over the next six months, while Gordon and nearby Turramurra and Lindfield should see 4%.

“The last Shore Financial State of Sydney Report, three months ago, suggested that the more affordable Sydney suburbs were likely to experience the strongest price growth in 2024, and that’s still the case,” Shore’s CEO Theo Chambers says.

“But what’s changed since then is the interest rate outlook, which could have a major short-term and even medium-term impact on Sydney property prices.”