NSW real estate: Top growth suburbs for house prices over coming decades
Keen to make a motza? These are the highly sought-after suburbs in Sydney with great potential for long-term capital gains.
NSW
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Suburbs offering the beach lifestyle, a cool inner city vibe or those near emerging transport and job hubs are expected to see the biggest spike in house prices in the decades ahead.
New research revealed these were the areas expected to outperform the rest of the housing market once the economy bounces back from the coronavirus crisis.
Much of the growth will be the result of a mix of low supply, high demand, rapid population growth and heavy infrastructure investment.
Changing lifestyle priorities, including a growing trend towards working remotely, will also push more people into fringe suburbs near national parks and waterways, housing experts said.
The most sustained growth in housing values was likely to be in key Western Sydney hubs, especially in the southwest, according to Hotspotting.com.au projections.
This was because of the raft of multi-billion dollar infrastructure projects such as the new airport at Badgerys Creek airport and Southwest Rail Link extension.
Hotspotting director Terry Ryder said the projects will turn the southwest into a major employment hub that will draw new people to the area and increase demand for property.
“It could easily become the biggest employment hub in Sydney,” Mr Ryder said.
“It’s not just that there will be a new airport, a range of new industries will emerge around the airport and people will want to live near where they work.”
Additional price growth in southwestern Sydney will be an extension of real estate sales patterns over the past 20 years.
A comprehensive realestate.com.au study showed many of Sydney’s top performing suburbs for house price growth between 2000 and 2020 were in southwest Sydney.
They included new suburbs such as Harrington Park and Currans Hill, where median prices increased by more than 500 per cent over the past two decades.
Other southwest suburbs like West Hoxton and Cecil Hills had price increases of over 350 per cent.
Realestate.com.au chief economist Nerida Conisbee said it was unlikely the same suburbs would lead the market over the next 20 years but growth would continue in the region.
“Enormous amounts of money are being spent in Western Sydney,” she said, adding the lifestyle on offer in much of the west was becoming more appealing to a broader demographic.
Sydney’s Sutherland Shire would also be a strong market because it offered a beach lifestyle without the price tag associated with eastern suburbs or northern beaches properties, Mr Ryder said.
“COVID-19 has sped up a trend of families seeking lifestyle markets because they only need to be at work two or three days a week,” he said.
“Against this background, the suburbs of the Shire offer good value, an excellent capital growth record and solid potential for future uplift.”
Parts of Sydney’s inner west were also due another dose of price growth, Ms Conisbee said.
Suburbs Newtown, Annandale, Marrickville and Drummoyne were among the most competitive markets, realestate.com.au’s latest demand index showed.
The index measures the demand for property relative to the number of listings, which Ms Conisbee said often indicated coming price rises.
“Suburbs with high levels of search activity relative to properties available often see growth,” she said.
An influx of younger families, such as those going to the inner west, also tended to increase prices, she said. “(Younger people) are good predictors of growth over the long-term.”
But those seeking properties that would grow in value quickly were warned to be patient.
My Housing Market economist Andrew Wilson said Sydney prices would likely be flat for the next few years because of COVID-19.
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Price growth, once it returned, would be less of a “rollercoaster” compared to recent years, he said.
“It’s unlikely interest rates will change anytime soon so there will be less of the rapid growth, steep declines, and rapid growth following lending changes that we saw in the last few years,” Mr Wilson said.
Head of research at Select Residential Property Jeremy Sheppard said affluent inner suburbs would likely bolt from the gates first once the market bounced back from COVID-19.
Past market recoveries showed growth often rippled westward from these areas as the market recovery strengthened, he said.
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Eastern suburbs like Dover Heights and Paddington recently saw a spike in demand but scant housing was available, Mr Sheppard said. These conditions often drove up prices.
SOUTHWEST DRAWS FIRST HOMEBUYERS
First-home buyers Michael Mittiga and Nazanin Raad are hoping buying near Badgerys Creek airport will see their house value take off.
The couple recently purchased a house in Leppington for $750,000 and said part of what motivated the purchase was knowing it in was a high growth area.
“We wanted to live here, but we also saw the capital growth potential and thought it would be a good investment,” Mr Mittiga, 27, said.
“We don’t have to be at work as often any more so being a bit further out wasn’t as much of an issue and the whole area is changing, it’s being built up quickly.”
Mr Mittiga added that they liked Leppington because it was at the end of a prominent line but it would also benefit from the South West Rail Link extension connecting the area to the airport and Penrith region.
Stone Real Estate-Camden agent Peter Salisbury said there has been a recent influx of other young couples into the area hoping to capitalise on the growth potential.