Sydneysiders who chased the Aussie dream in outer suburbs have been rewarded with some of the best home value gains this decade, while those who bought high-rise units often copped property losses.
New data has lifted a lid on the properties that have performed the best and worst over the past 10 years, exposing a radical split in the fortunes of those who bought outer houses and high-rise units.
Houses in some of Sydney cheapest outer western regions offering improving infrastructure recorded among the biggest average gains in home values, with prices close to doubling, the analysis of PropTrack data showed.
It’s been a different story for those who bought high-rise units off the plan in middle-ring areas – property prices in many of these areas have actually gone backwards in the past decade.
And that’s meant many of the owners of these properties who purchased off the plan in the mid-2010s have often had to accept prices below what they paid when it comes time to sell.
A unit in this Olympic Boulevard tower in Sydney Olympic Park recently sold for $635,000, which was below the 2016 price of $784,980.
Diaswati Mardiasmo, the chief economist at property group PRD, said the differences in the price gains on houses and units was mostly down to “supply”.
“Buyers have thousands of options for high density units,” she said. “For houses in most areas, there is very little choice.”
Suburbs where median unit prices were 5-27 per cent lower than they were in 2016 included Sydney Olympic Park, Parramatta, Hillsdale, Zetland, Rosebery, Mortlake, Lewisham and Auburn.
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Each of these suburbs had seen a spike high-rise unit construction in the mid-2010s, characterised by an oversupply of investor-grade stock – typically one-bedroom and two-bedroom apartments.
Sydney Olympic Park, the location of the Opal Tower, where residents were evacuated in 2018 due to fears over dangerous cracking, had the sharpest 10-year fall in prices.
Source: PropTrack
A typical unit in the suburb cost $932,000 in 2016 compared to $708,000 today, a drop of 27 per cent.
Ms Mardiasmo said the nature of high-rise development meant units across multiple projects were often made available at the same time. “Developers oversupplied many areas with units, particularly two-bedrooms units,” Ms Mardiasmo said.
“A key reason the prices haven’t gone up as much is that buyers have a choice. They could buy a high-rise unit in a middle-ring area or, for the same price, buy a house in outer area.
“We’re finding most probably prefer the house. They will give up some of the convenience if it means they have a larger house with some land.”
Low density outer suburbs dominated by single-level housing, along with low-density coastal areas, had the largest average property value increases over the same period, PropTrack revealed.
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Source: PropTrack
House prices in Penrith suburb Jordan Springs nearly doubled over the 10 years. There was similar growth in beaches suburbs North Manly and Fairlight.
Rises in far western suburbs Claremont Meadows and St Marys were about 75 per cent, well above the Greater Sydney average of 58 per cent.
Ray White United Group director Peter Diamantidis, who leads multiple real estate offices across Western Sydney, said these western suburbs had become “extremely” popular since Westconnex road links were opened in 2019.
“It’s made the region much more appealing,” he said. “Most of our buyers are out of area now. They’re moving from places like Parramatta because it’s cheaper and more convenient than in the past.”
Siddhartha Shakya and Binita Shrestha are selling their home in St Marys, an area that has become hugely sought after. Picture: Richard Dobson
A similar trend was unfolding in the suburb of St Marys, which was attracting considerable demand due to the construction of a rail link that will connect the suburb to the coming Western Sydney airport.
“Developers will spend a lot of money on the bigger blocks in St Marys,” Mr Diamantidis said.
St Marys resident Siddhartha Shakya said home value rises have been so sharp in recent years that it has allowed him to move forward his plans to upsize.
Mr Shakya bought a home in the area three years ago and by selling the three-bedroom house on Kalang Ave he will be able to now buy his “dream home”, a larger property nearby.
“The better value has brought a lot more people here,” he said. “We wanted to buy here because of the coming metro and as its got closer the prices have continued to increase.”
PRD chief economist Dr Diaswati Mardiasmo said some high-density Sydney suburbs had been oversupplied with units in the 2010s. Picture: Contributed
B.Invested buyer’s agent and property commentator Nathan Birch said the split between higher-performing real estate in cheaper areas and lower growth in high-rise prices was basic economics.
The bottom end of the market simply attracted more buyers and was more resilient to price corrections because buyers always sought out cheaper opportunities to buy in times of uncertainty, he said.
“Some of my best investments have been cheapies in places like Mount Druitt,” Mr Birch said, adding these same affordable areas also attracted a significant share of migrant buyers.
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