Cheaper, well-connected suburbs to get biggest price rises in Sydney over 2023: Hotspotting
Bridesmaid suburbs – areas with more affordable prices than their neighbours and improving infrastructure – will record the biggest surge in home prices over 2023, modelling has revealed.
Sydney’s “bridesmaid” suburbs are set to shine in what will be a challenging year ahead for the housing market.
Prices across most of the market are expected to continue falling as cost of living pressures and interest rate rises drain household budgets, but there will be pockets of rare growth.
So-called “bridesmaid” suburbs – areas with more affordable prices than their neighbours, along with good amenities and improving infrastructure – will record the biggest surge in home prices over 2023, a new report has revealed.
The data from property research group Hotspotting showed that relative affordability will be a key determinant of which markets still record growth in the midst of the ongoing downturn.
Among the markets expected to grow were a range of suburbs in the Canterbury-Bankstown area where average house prices ranged from $900,000 to $1.5m.
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The suburbs included Croydon Park and Wiley Park, where property sales volumes were rising over the second half of 2022, despite waning buyer demand across Sydney as a whole.
There were an additional 15 Canterbury-Bankstown suburbs where sales volumes were rising – in some cases due to an influx of buyers who had originally been looking in the inner west or St George region. Parts of the Liverpool and Campbelltown areas were also identified as growth regions.
Wollongong was another market set for further growth, due to the more affordable prices relative to Sydney, along with its enduring appeal for remote workers employed with Sydney-based companies.
Units were tipped to outperform houses in many locations due to the better price accessibility and skyrocketing rents encouraging investors back into the market.
Suburbs with some of the biggest gaps between unit and house prices – where unit prices were expected to grow – included inner west suburbs Ashfield, Strathfield, Marrickville and Dulwich Hill.
Other suburbs with a similar price gap of more than $1m between unit and house prices were Canterbury, Lakemba, Croydon Park, North Parramatta, Ryde and Kogarah.
Traditionally popular suburbs that boomed over 2021 and early 2022 would be among the most likely to see further price drops as the market recalibrates following recent rate hikes.
Hotspotting director Terry Ryder said prices were expected to continue falling over most of the NSW market over the first half of 2023.
Suburbs offering more affordable prices relative to other usually more popular nearby markets were a prime candidate for price rises in 2023 and some had already started to grow, Mr Ryder said.
“People are searching for affordability,” Mr Ryder said. “The affordable end of markets are still holding up well and some are thumping.
“Apartment sales in middle areas are also starting to rise and first homebuyers are becoming more willing to settle for an apartment purchase rather than a house because of the big price difference.”
Reece and Kristen Tilbrook recently bought a home in Padstow in the Canterbury-Bankstown area after realising they would get much better value, but noted it was a competitive market.
Mr Tilbrook said the prices, relative to the quality of housing and block sizes, were much lower than in neighbouring areas such as the St George region.
The difference was that prices were not dropping and properties were selling quickly, Mr Tilbrook said. “Once you go below $1.3m it gets pretty competitive. It feels like that’s where a lot of the other buyers are.”
Mortgage Choice Revesby broker Michael Saliba said recent interest rate hikes hadn’t dampened serious buyers’ plans to purchase in 2023 and there were still many waiting for the right property to come up for sale.
He added that most buyers were adjusting to recent interest rate rises by branching out from their preferred location.
“Often they’re not willing to compromise on the type of house they want, but they will go further out to somewhere cheaper if it means they can still get the kind of property they’re looking for,” Mr Saliba said.
“Another thing is that buyers are being more cautious with how much they spend because rates could go up again. In 2021, buyers were willing to stretch themselves ... Now they would rather buy in a much cheaper area that’s well within the range of what they can afford.”
Originally published as Cheaper, well-connected suburbs to get biggest price rises in Sydney over 2023: Hotspotting