Sydney suburbs defying price downturn revealed

1 day ago 2

Sydney’s slim pockets of property price growth are now overwhelmingly concentrated in the city’s most affordable outer suburbs, where first-home buyers, newly arrived migrant families and a shrinking pool of investors are competing for homes.

PropTrack data reveals median house values increased in just 28 suburbs across Greater Sydney over the past three months, while unit values increased in 72 suburbs, or about 20 per cent of the suburbs with available unit data.

MORE: Sydney suburbs with biggest price falls revealed

Unit values flatlined in about 11 per cent of the market and fell in 69 per cent of suburbs.

Most growth areas were more affordable suburbs still attracting demand from households priced out of the rest of the market.

New data reveals median house values increased in just 28 suburbs across Greater Sydney over the past three months. Picture: NCA NewsWire / Max Mason-Hubers

Some suburbs with the greatest quarterly growth included Berkeley Vale (14 per cent), Kincumber (11 per cent) and Thornleigh (8 per cent).

B.Invested director and buyer’s agent Nathan Birch said recent tax reforms had split the market, with prices falling across most areas, especially for luxury homes, while continuing to rise in a handful of cheaper suburbs.

MORE: ‘Cooked’: Landlords not allowed to rent homes

These lower priced suburbs were mostly on the edges of Western Sydney and were continuing to grow because they attracted stiff competition from three major groups, Mr Birch said.

Binstead founder and director Nathan Birch

One was overseas migrants seeking out homes after getting permanent residency, the other was first-home buyers accessing the government’s 5 per cent deposit scheme, and the remaining demand was from the few investors still actively searching for homes, who were attracted to the higher rental yields available in cheaper areas.

“The government reforms have pancaked everyone into the bottom of the market and that’s meant prices for the cheapest properties are rising,” Mr Birch said.

Ray White analyst Atom Go Tian said scatters of growth could be explained by a flight to affordability.

“The instinct is to assume that when we’re in a downturn it will hit everywhere evenly and this data is evidence that it doesn’t, we know that in times of uncertainty,” he said. “(Buyers’) their ability to borrow is weaker and so they go for these more affordable suburbs,” he said.

Ray White Group senior data analyst Atom Go Tian. Picture: Riccardo Raiti

Downsizers Dale and Lynne Kennedy purchased a penthouse in Castle Hill, a suburb that has seen a 1 per cent rise over the quarter.

“Everything is going down and it looks very gloomy for everybody else,” Ms Kennedy said.

“I feel we are very fortunate because we’ve made obviously the right decision, our area or Castle Hill area in general has really stayed strong, both in apartments and houses.”

According to Ms Kennedy, the market downturn is concerning for first time buyers and retirees.

“It hasn’t been favourable for many people or for most people really which is very disappointing,” she said.

“Growth wise, it’s a bit of a bloodbath out there. Nothing is selling, nothing’s moving.

MORE: 4yo to own Aus home in $25/wk ‘power’ move

Downsizes Dale and Lynne Kennedy purchased in Castle Hill, one of the suburbs with quarterly growth. Picture: Sam Ruttyn

“People are trying to offload investment properties, which is also concerning and also pushing rental prices up, interest rates going up again, it’s all gloomy and we feel for people either trying to get into the market or trying to even upgrade at this time and sell their homes.”

Ms Kennedy said the pair are in a good position.

“We are in that position where we managed to sell earlier and purchase our brand new property earlier and we feel that we’ve done very well price wise and location wise.”