The 24 Sydney suburbs where home values declined in 2021

Only a handful of Sydney suburbs experienced any decline in property values in 2021. Looking for a bargain? Find one here.

Bargain hunters can snap up homes for reduced prices in Sydney’s inner suburbs, parts of Parramatta, Ryde and the Canterbury-Bankstown region.

These areas had the bulk of the 24 Sydney suburbs where unit prices dropped over the past year, according to Market Trends data from realestate.com.au.

The average price falls ranged from about $10,000 in Parramatta region suburbs Westmead and Merrylands to about $100,000 in Punchbowl in the Bankstown area.

The weaker price performance in these areas contrasted the rest of the market, where there was an unprecedented boom in prices last year.

CoreLogic reported home prices – based on sales of units, houses and townhouses – climbed nearly 25 per cent for the year – the fastest annual rise since the late 1980s.

A unit in this Liverpool block sold for $80,000 less than the 2015 price last year.

Ray White chief economist Nerida Conisbee said unit prices fell in some areas because fewer investors wanted to buy apartments during the Covid period.

Investors were historically the main market for units but shied away from purchases due to closed borders halting migration and, in turn, rental demand, she said.

“When rents drop and there’s not much demand from tenants, it’s not attractive to buy a unit as an investor,” Mr Conisbee said.

This pattern was particularly evident in Sydney areas that were popular with newly arrived migrants, including much of the Parramatta and Canterbury-Bankstown regions.

Following rent falls, unit prices dropped by nearly $70,000 in Belmore and $10,000 in Wiley Park – the latter was already one of Sydney’s cheapest areas.

Unit prices in Rosehill, 2km east of Parramatta, dropped by about $30,000, or 5.8 per cent, over the year. The analysis excluded suburbs with fewer than 50 sales in 2021.

“We have had negative migration over the last two years, so if you look at what hasn’t performed, its units in these places popular for first generation migrants,” she said.

Ms Conisbee said the winding back of border restrictions this month suggested unit markets where prices fell during the last year could be bottoming out.

And this meant the lower prices on offer for home seekers would be temporary, she said.

“We are starting to see increased rental demand. As we see more lifting in rents, it will support increases in value. So we’re at a point where it’s as low as its going to get.”

Economist Nerida Conisbee said unit prices dropped due to declining investor activity.

My Housing Market economist Andrew Wilson said regions such as Parramatta and Ryde had an excess supply of newly built units in recent years and this put downward pressure on prices.

“There was an apartment development boom five years ago and all that stock came through,” he said.

Mr Wilson added that the glut of available properties has been diminishing because developers have been constructing fewer new units.

“There is no new supply behind it. Nothing is coming through behind that big wave of development,” he said.

“It will take a long time until the new (projects) with approval will be available to live in.”

Mr Wilson said the Sydney suburbs with the largest supply of available housing would be among the first to attract newly arrived migrants.

“Government has committed to a wave of new migration coming in and there is pressure from significant industries to ensure student numbers return.

This inner Sydney unit recently sold for less than the 2015 price.

“So we are going to go from zero migration to a large number very quickly. Markets with excess supply will be the first targets for that migration.

“That will be a real force to be reckoned with in property markets.”

Outside of the Parramatta, Ryde and Canterbury regions, some of the biggest price drops were recorded in St George suburbs with large amounts of hi-res development.

This included Kogarah, where the median unit price dropped nearly $114,000, or 14.6 per cent, over the year.

Newtown and Annandale, popular rental markets for students, had units price drops of $21,000-$22,000.

In nearby Lewisham, where there was considerable apartment development south of the local train station in 2015 and 2016, the median unit price dropped $57,000.