Didn’t boom: Sydney suburbs with the most undervalued properties

Not everywhere had rampant property price growth last year and some city pockets are “undervalued” with opportunities to buy for much less. See where to get the best deals

They’re the suburbs where property values didn’t explode last year and home seekers can get cheaper prices than in neighbouring areas.

Analysis of property data showed Sydney property prices surged by an average of 25 per cent last year, but not every suburb saw rampant growth and some remained flat for the year.

It’s meant multiple city pockets remain “undervalued”, giving buyers the opportunity to purchase at lower prices, before they catch up with their neighbours.

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The bulk of these pockets were suburbs that had a high supply of new apartments last year and the greater choice of housing options meant buyers didn’t need to outbid each other to get into the market.

Many were commuter suburbs near Parramatta or other emerging business hubs such as Macquarie Business Park in the northwest.

McGrath-Liverpool agents Carina Bella and Venessa Ku at a home for sale in Casula. Picture: Tim Hunter

The suburb with the slowest growth in prices last year was Mays Hill, near Parramatta, where unit values crept up 1 per cent, according to the CoreLogic data. No suburb recorded price drops.

Suburbs with less than 3 per cent growth in median unit prices included other Parramatta region suburbs Westmead, Harris Park and Rosehill, along with northwest suburb Epping.

Rockdale, Kogarah, Bexley and Turrella in the St George region also had minimal growth in unit prices.

By contrast, house price rises in Sydney’s top growth suburb last year hit more than 45 per cent, with some median prices ballooning by more than $1m.

CoreLogic head of research Eliza Owen said Sydney apartment prices underperformed relative to houses last year because buyers were prioritising space during the Covid pandemic.

Investors, who normally accounted for a large share of the demand for units, also largely avoided the apartment market last year because closed international borders meant fewer tenants and rents dropped.

“The absence of overseas migration affected areas like Parramatta and once that changes and there is more migration, some unit markets may see catch up,” Ms Owen said.

Another key influence on apartment prices would be whether employers continued remote working arrangements.

Employers demanding workers return to their offices for much of the week would boost demand for units in areas with good transport links, Ms Owen said.

“It’s a bit of an unknown at this stage, because of Omicron,” she said.

Units in this building on Hardy St in Fairfield have been listed for less than $320,000.

Ms Owen added that inner city unit markets were particularly undervalued at the moment, despite the prices being among the highest in the country.

“Haymarket, Pyrmont and other areas that attract overseas students had the biggest declines in rental values and were the most impacted by the pandemic … in the long term, they are still desirable areas.”

Stone Real Estate director Sam Abbas said the Rockdale-Kogarah area and surrounding St George suburbs were also undervalued.

“They was an oversupply of units, mostly brand new units, which people didn’t want because of the defects we’ve seen in new buildings,” he said.

“That oversupply is now getting absorbed and there is a lot more buying activity, especially for older units in smaller blocks. Six months ago there wasn’t much (unit) demand at all.”

The Liverpool CBD, where prices ticked up 5.6 per cent, remains among Sydney’s cheapest suburbs to buy a home.

The median unit price is $425,000 and local agent and McGrath Liverpool director Glen Craigie said buyers could get 10-year-old three-bedroom units for half a million.

Many of the most undervalued suburbs are near Parramatta.

“The units are catered to mum and dad and two kids,” Mr Craigie said.

Prices were depressed in Liverpool and surrounding suburbs like Casula because there was an oversupply of units in previous years. The market then gradually evened out as more first homebuyers came to the area seeking value.

“Prices still grew, just not the 20 per cent rises we saw with houses,” Mr Craigie said.

“Compared to houses, units are much more buyer friendly. You have enough choice to make a considered decision. You can go to 10 inspections on the Saturday and think about your options.

“With houses you’ll be able to inspect two or three and will have to make a decision very quickly or it will be gone.”

Auctioneer and Stone Real Estate agent Eddy Piddington said even on the northern beaches – by far the fastest growing housing market last year – units were “incredible value”.

Epping unit values grew little last year, despite the housing boom.

“You can get them for a third of the price of a house now. You don’t usually get that kind of gap,” he said. “It obviously won’t have a yard, but in places like Manly you’d pay less and get an ocean view instead.”