While the heat is coming out of the wider Sydney property market, there are some individual suburbs that are set to defy the trend and continue growing over the next six months, according to the latest Shore Financial State of Sydney Report.
The quarterly Shore Financial State of Sydney Report divides Sydney’s 600-plus suburbs into five quintiles, based on their current median asking price for houses:
● Quintile 1 = Heartland Sydney
● Quintile 2 = Suburban Sydney
● Quintile 3 = Rising Sydney
● Quintile 4 = Professional Sydney
● Quintile 5 = Affluent Sydney
* The median house price growth over the past 12 months is not for the suburb but the ‘SA3
region’ (a technical term the Australian Bureau of Statistics uses to define a cluster of
suburbs) in which the suburb is located. SA3s often closely align to local government areas.
Shore Financial CEO Theo Chambers said the Shore Financial State of Sydney Report had identified a shift in the Sydney property market.
“Over the year to July, Sydney’s median house price jumped 11.6%. This growth reflects robust market demand and constrained supply, with prices showing consistent upward momentum, particularly in the past six months as buyer competition intensified,” he said. “Even though listings have marginally increased in recent months, most of this is in unit markets whereas the house market remains as tight as ever. Across Greater Sydney, we count strong sellers markets for 40% of suburbs for units and an astounding 90% of suburbs for houses.
“Most house markets have less than three months of inventory, which suggests ongoing competition among buyers and supports a solid growth forecast for the near term.
“It’s also worth noting that there’s been a sharp increase in investor activity, potentially because investors are trying to front-run expected rate cuts from the Reserve Bank, which would potentially increase buyer competition and push up prices.”
The latest Australian Bureau of Statistics data shows that 42.9% of NSW loan commitments in June 2024 were for investor finance, compared to 39.5% in June 2023 and a 10-year average of 39.1%.
“That said, we have taken a conservative approach with our forecasts given the uncertainty around interest rates and the likely easing of population growth,” Mr Chambers added.
“The standout suburbs in the Shore Financial State of Sydney Report have very low levels of inventory, which is forcing buyers in those specific suburbs to compete harder and bid up prices. This dynamic underscores the importance of localised market analysis when assessing future performance in Sydney’s housing market.”
Mr Chambers noted that the research for the Shore Financial State of Sydney Report had also identified very different outlooks for different price-points.
“Higher-priced suburbs, particularly those with medians above $3 million, are generally projected to experience more modest or even negative growth. In contrast, lower to mid-range suburbs, particularly those around $1 to $2 million, are expected to see stronger growth,” he said.
“This suggests that demand may be shifting towards more affordable areas, while the top-tier market faces challenges, possibly due to affordability constraints or market saturation.
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