Sydney and NSW suburbs where home values will rise by over $500k in five years

Property values are in line to climb by more than $500,000 in parts of Sydney and NSW, according to research identifying what every suburb’s home prices could be in five years.

Home values would balloon by more than $500,000 in just five years across over 90 Sydney suburbs and close to 100 regional NSW suburbs if growth from recent years was to continue.

The biggest price rises would occur in already expensive coastal markets in Sydney’s east, along with popular holiday markets up the NSW coast, according to exclusive PropTrack research.

The analysis of median price data revealed what properties across the country would cost by 2028 if the last five years of growth was repeated.

The period saw two market slumps, an 18-month boom, and a mix of record low interest rates and record interest rate increases.

Suburbs where prices would rise by more than $500,000 if the trajectory of the last five years continued included inner west Harbour enclaves Five Dock and Haberfield, along with nearby Enfield and St Peters.

The inner west would be primed for more growth if prices continued to grow at the same rate as the last five years. Picture: Gaye Gerard

The analysis examined data for dwellings, which includes units, houses, townhouses and more.

North shore suburbs where homeowners would get the biggest average equity gains would be Castle Cove, Willoughby, Pymble, Roseville, Northbridge, Killara and Castlecrag.

The northwest would be another strong growth area with rises of more than $500,000 over the five years in Putney, Eastwood, West Pennant Hills, East Ryde and Denistone.

Suburbs in the Hills District that would get similar growth would be Castle Hill, Glenhaven, Bella Vista, Kellyville, Baulkham Hills and Cherrybrook.

Some of the biggest rises in regional NSW prices would occur in coastal suburbs.

The analysis also showed million dollar unit prices and $2m house prices would become the norm in much of Sydney by 2028, with home buyers in some suburbs expected to pay double current prices.

Greater Sydney’s typical unit value would climb 33 per cent over the next five years, while average house value increases would be 54 per cent over the five years, requiring buyers to fork up millions more than they’re currently paying in some areas.

PropTrack economist Paul Ryan said the Sydney market was primed for more growth, despite already expensive prices and rising interest rates, because developers weren’t build housing fast enough to meet surging demand.

There was also tremendous existing wealth in the housing market due to previous market booms, which meant many new buyers were sitting on big stockpiles of equity they could use to bid up prices.

“These buyers wouldn’t be as affected by interest rate rises because they don’t need to take out big loans,” Mr Ryan said, noting some of the most active buyers in the current market were only borrowing 50 per cent of the value of their properties.

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Competition has been ramping up at auctions this year. Picture: Adam Yip

Buyer's agent Rich Harvey said FOMO was creeping back into the market.

Mr Ryan said the modelling did not represent an exact forecast for the housing market since past performance was not a definitive indicator of future price rises, but many of forces that drove prices higher over the last decade remain in place.

“It’s there will be enough housing to meet demand. We are clearly not building enough housing,” he said.

Greater Sydney’s median house price was expected to grow from the current $1.33m to $1.96m, while the median unit price would change from $750,000 to $916,000, according to the PropTrack analysis.

Mortgage broker Chantelle Rangel, director of Mortgage Choice Marrickville, said rent rises were pushing more first homebuyers into purchasing.

And many new buyers were paying attention to the potential value rises they might get in an area, Ms Rangel said.

Coastal suburbs have been some of the biggest performers over the last five years. Picture: CBRE

“Most clients expect prices to increase,” she said. “They purchase in areas they want to live in, but the investment side of it has been growing important too. It’s coming up in conversations.”

Buyer’s agent and PropertyBuyer director Rich Harvey said home seekers were growing wary of the affect of rising migration on prices and a fear of missing out was returning to the market.

“There were a lot of people who missed out on the chance to get into the market in 2021 when the market was booming,” he said. “With migration rising, there’s a fear they will miss out again.”

Master Builders Australia CEO Denita Wawn said building approvals are heading in the wrong direction at a time when communities are crying out for more housing.

The northwest would be a high growth area. This house is currently the priciest sold in the suburb at nearly $3.7m.

“We can see the impact of rising interest rates in the homebuilding market, and without appropriate fiscal measures at a federal and state level, we will continue to see further softening in the housing pipeline,” Ms Wawn said. “Home building over the first three months of 2023 show approvals at their lowest level in a decade.”

Originally published as Sydney and NSW suburbs where home values will rise by over $500k in five years