Western Sydney suburbs offering more affordable prices are expected to get a considerable jump in home values over the next six months, a new report has revealed.
The Shore Financial research indicated outer suburbs such as Mount Druitt, Whalan, Eschol Park and Ambarvale – some of Sydney’s cheapest areas – were forecast to get price growth of over 5 per cent in the next six months alone.
Other markets forecast to get a similar level of growth were spots around the city offering a more affordable entry point into perrenially popular coastal markets, such as the Northern Beaches and the Sutherland Shire.
Suburbs in these regions forecast to get growth of over 4 per cent – which would add close to $100,000 to the average house value in some cases – included Dee Why, Miranda, Kurnell, Wheeler Heights and North Narrabeen.
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Demand at auction has already heated up since rates were cuts. Picture: Sam Ruttyn
These growth projections have come as mortgage brokers indicated recent interest rate cuts have launched a scramble for property in more affordable markets.
The federal government’s announcement this month that it would fast track the roll out of the First Home Guarantee scheme to October, while also expanding the eligibility criteria, could also boost demand in affordable areas, brokers claimed.
Government had previously restricted the scheme – which allows first-home buyers to purchase homes with deposits as low as 5 per cent without needing to pay pricey lenders mortgage insurance – to those buying Sydney properties under $900,000.
The price cap will, from October, rise to $1.5 million. Income caps, which restricted eligibility to couples earning less than $200,000 and singles earning under $125,000, will also be removed.
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The ‘Heartland Sydney’ quintile top five suburbs. Source: Shore Financial
The ‘Suburban Sydney’ quintile top five suburbs. Source: Shore Financial State of Sydney Report.
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The Shore Financial report noted that while the Sydney property market is likely to experience overall growth in the next six months, conditions are likely to vary significantly depending on the postcode.
While some commentators are expecting strong growth across all suburbs, this new data reveals a more nuanced picture.
The quarterly Shore Financial State of Sydney Report presents a house price forecast for the next six months which divides Sydney’s 600-plus suburbs into five quintiles, based on their current median asking price for houses.
Suburbs were excluded if they didn’t meet certain benchmarks and trends related to asking prices, days on market, inventory levels and sales volumes over the previous three months. The remaining suburbs were ranked based on expected growth in asking prices over the next six months.
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The ‘Rising Sydney’ quintile top five suburbs. Source: Shore Financial State of Sydney Report.
These suburbs were broken down into Heartland Sydney, Suburban Sydney, Rising Sydney, Professional Sydney and Affluent Sydney.
The report then picked the top five suburbs in each quintile.
Shore Financial CEO Theo Chambers said the six-month forecasts issued in the previous edition of the State of Sydney Report in February turned out to be accurate.
“The forecasts held up very well in the Heartland Sydney, Suburban Sydney and Rising Sydney suburbs – the three lower-priced quintiles – as the firm levels of demand we anticipated played out, in part due to the interest rate cuts in February and May,” he said.
“However, there were some discrepancies in the Professional Sydney and Affluent Sydney suburbs – the two higher-priced quintiles – which underperformed the forecasts, likely due to affordability pressures.”
The ‘Professional Sydney’ quintile top five suburbs. Source: Shore Financial State of Sydney Report.
Mr Chambers said while some commentators are expecting very strong growth rates throughout Greater Sydney in the next six months, the analysis conducted for the Shore Financial State of Sydney Report suggested a more nuanced picture.
“In some suburbs, growth rates are highly likely to exceed five per cent for the next half-year, putting them on track for double-digit annual growth rates,” he said.
“Many of those suburbs have low levels of inventory, which will force buyers to bid hard, especially for A-grade properties.”
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The ‘Affluent Sydney’ quintile top five suburbs. Source: Shore Financial State of Sydney Report.
Mr Chambers said there are other pockets of Sydney where prices will barely move – or even decline – over the next six months, due to a combination of affordability pressures and higher levels of supply.
According to Mr Chambers, further rate cuts would put upward pressure on prices, but would not lead to the kind of rampant growth seen in 2021.
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Shore Financial CEO Theo Chambers
“If interest rates fall further in 2025, buyer’s confidence and borrowing power will increase, which should lead to a rise in demand,” he said.
“That said, buyers don’t have unlimited piles of cash to spend.
“Australian Bureau of Statistics data show that, in the four years to June 2025, wages throughout the country grew 14.4 per cent while prices rose 19.2 per cent, which meant the average Australian suffered a pay cut in inflation-adjusted terms.
“In other words, Sydney buyers are facing affordability constraints, which will put a ceiling on any near-term growth.”
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