State of Sydney Report November 2024

While the Sydney property market has been slowing in the second half of the year, the latest edition of the Shore Financial State of Sydney Report has found that many suburbs are likely to keep growing over the next six months.

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

 

Standout suburbs – Heartland Sydney (quintile 1)

Standout suburbs – Suburban Sydney (quintile 2)

Standout suburbs – Rising Sydney (quintile 3)

Standout suburbs – Professional Sydney (quintile 4)

Standout suburbs – Affluent Sydney (quintile 5)

* 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 machine-learning analysis that was used for the Shore Financial State of Sydney Report found that 74% of suburbs were likely to experience price growth over the next six months, while 11% were likely to remain stable and 15% to go backwards.

“Despite the fact the overall Sydney market has been slowing, this outlook suggests continued strength over the next six months, albeit with some suburbs facing potential stagnation or mild downturns,” he said.

“However, it’s important to interpret the data accurately. Using suburb-level median prices to gauge the entire Sydney market can be misleading, especially since many suburbs with limited monthly sales can experience volatile pricing. That’s why it’s better to look at individual local markets rather than the city as a whole.

“The outlook is promising for each of the 25 suburbs in the Shore Financial State of Sydney Report, because they’re still seller’s markets. These suburbs tend to have low listings volumes, low inventory levels and low days on market. As a result, buyers realise they need to move fast and make strong offers if they want to secure properties, which is putting upwards pressure on asking prices.

“For other suburbs in Sydney, the forward-looking indicators are weaker. Many are finely balanced between buyers and sellers, while some are buyer’s markets.”

Mr Chambers said one theme that was consistent across most suburbs was that they’re becoming increasingly beyond the reach of first home buyers who want to purchase a freestanding house.

“Sydney first home buyers are increasingly purchasing houses in outlying suburbs, or opting for more affordable units, or giving up on Sydney and rentvesting into cheaper markets. For them, the outlook over the next six months is not encouraging,” he said.

“Another point worth mentioning is that while the Reserve Bank of Australia remains hawkish on inflation, there’s a reasonable chance it may start easing monetary policy in the first half of 2025. Even a small reduction in rates should lead to improved loan serviceability and higher borrowing capacities, which will bolster demand. That is likely to put further upward pressure on prices, although this will be unevenly distributed across suburbs.”