Boom ‘burbs: 67 Sydney suburbs where home prices are tipped to rise

Home prices are predicted to rise in many suburbs as the market rebounds from last year’s downturn, but there are some areas set for further price drops. Search the interactive

Many Sydney suburbs are expected to see property price rises this year despite recent interest rate hikes, new analysis shows.

The latest Price Predictor Index released by research group Hotspotting revealed conditions have been picking up in much of the city and most areas were primed for minor growth in prices.

The report also revealed 22 of the 100 national locations expected to see the strongest growth in property prices were in Sydney.

These “supercharged” suburbs included a mix of coastal areas, inner city enclaves and middle-ring regions with more affordable housing.

There were an additional 45 suburbs expected to have above average value rises.

Yet Sydney was also flagged as one of the most fragmented markets in the country, with rising sales in some areas expected to coincide with worsening conditions in others.

Richard Gregory, Bronwyn Dzirins and Andrew Gregory recently sold their mother’s Padstow home for nearly $200,000 more than expected. Picture: Sam Ruttyn

Among the dark spots for the market was the so-called “mortgage belt” of outer suburbs where homeowners and buyers were on lower incomes and more vulnerable to interest rate rises.

Hotspotting director Terry Ryder said there was “growing evidence” that the market as a whole was improving, but some areas were recovering faster than others.

“Different markets are being affected in different ways by interest rates, population trends and economic conditions,” Mr Ryder said.

“But the dominant factor driving (price) growth going forward is that we have an incredible shortage of housing, both in the rental market and in terms of properties listed for sale.”

The coastal suburbs tipped to see growth were many of the northern beaches and Central Coast areas that recorded massive falls last year such as Avalon Beach, Balgowlah and East Gosford, according to the Price Predictor Index.

Clovelly and Woollahra in the eastern suburbs were in a similar position: price rises were expected following significant falls in 2022.

Inner suburbs primed for growth were Haymarket, Ultimo, Wolli Creek and Ashfield – areas that have been extremely popular with investors due to an influx of students seeking rentals.

Middle-ring areas with increasing sales volumes – an indicator of a coming rise in prices – were Chipping Norton, North Parramatta, Rouse Hill, Smithfield and Kings Park.

Mr Ryder said these middle-ring suburbs were popular with upsizing buyers because they were a cheaper alternative to areas such as the inner west, but there were few properties for sale.

This was putting pressure on buyers to bid up prices and many were able to draw on large amounts of equity from the sale of their previous properties to fund the purchase of a new property.

LJ Hooker Padstow director Lush Pillay said this trend has pushed up prices in much of Sydney’s southwest.

“Often we’ll get buyers who sold up an apartment in somewhere like Zetland and they move to this area because it is a lot cheaper than the inner west or the St George area,” he said.

Mr Pillay added that selling an inner city apartment often gave buyers good budgets to secure houses or duplexes in the southwest and many of these buyers could outbid first homebuyers.

Some homeowners have been surprised at how quickly things have changed.

Padstow resident Richard Gregory said he wasn’t expecting a big result when he listed his family home due to the weaker market last year, but was pleasantly surprised when it went to auction.

The home on Gloucester Ave sold for nearly $200,000 more than they expected and attracted eight bidders at auction.

“With interest rates rising, everyone assumed prices were going down, but our experience suggests otherwise,” Mr Gregory said.

Sydney suburbs that may continue to record price falls were outer suburbs where homeowners on lower incomes were spending a greater portion of their income repaying their loans, Mr Ryder said.

This meant the homeowners were more likely to sell to combat the impact of recent interest rate hikes.

And the increased sales at a time when many of the buyer pool for these properties were struggling to get financing would in turn drag down prices, Mr Ryder said.

“A lot of Sydney’s outer ring has continued to fall,” he said. “Buyers in these markets are also more likely to leave Sydney for a cheaper area like Newcastle.”

Originally published as Boom ‘burbs: 67 Sydney suburbs where home prices are tipped to rise