State of Sydney Report February 2024

As debate continues over the outlook for the Sydney property market, the latest edition of
the Shore Financial State of Sydney Report has revealed which suburbs, in a range of
price-points, are likely to outperform the market.

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:

The quintiles are:
● 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)

Shore Financial CEO Theo Chambers said the Sydney property market had changed a lot in the past 12 months, and that there were different views about what to expect from the year ahead. “This time last year, we were emerging from a correction, and, while we thought the downturn was behind us, no one could say for sure. As it turned out, a year of uninterrupted growth followed,” he said.

“Now, the situation is different and there are two schools of thought around how things will play out over the next 12 months. One group believes house prices will soon decline, due to affordability constraints, and that Sydney’s median house price will be lower at the end of 2024 than the start. The other group believes demand will continue to outstrip very limited house supply, particularly if interest rates start falling towards the end of the year, and that 2024 will be another year of growth.

“From the research that’s been conducted for the Shore Financial State of Sydney Report, we believe Sydney’s median house price will be higher at the end of 2024 than the start. However, whereas the vast majority of Sydney suburbs experienced growth in 2023, there’s likely to be more deviation in 2024. Most suburbs should grow, but some will stagnate and a few will go backwards.

“The more affordable end of the market, in the western suburbs, south-western suburbs and Blue Mountains, is likely to experience stronger price growth than some of the more affluent suburbs, in the north and east of the city.” Mr Chambers said 2024 auction results were providing strong supporting evidence for anyone who expected Sydney prices to increase throughout the year.

“There’s been a significant year-on-year increase in both new listings and scheduled auctions, reflecting widespread market confidence. Buyers are confident about the future of the Sydney market, so sellers are confident about listing their home for sale.” However, Mr Chambers said that whatever happened with market activity and prices over the next six to twelve months, it would probably be better for buyers to take a long-term view.

“If you’re an owner-occupier, it makes more sense to focus on where you want to live and what you can afford, rather than short-term price movements. True, some suburbs will outperform others, but that shouldn’t matter if you’re happy with your choice of home. “If you’re an investor, it makes even less sense to focus on the short-term. Presumably, anyone who invests in Sydney property believes – with good reason – that Sydney prices are likely to grow strongly over the long-term. In that case, time in the market is more
important than timing the market.”