Sydney, NSW’s highest price growth suburbs revealed: why these areas are bucking the real estate downturn

These Sydney suburbs are defying the real estate downturn by recording NSW’s highest price growth, due to several revealing factors.

Sydney’s housing slump has yet to spread to every suburb and there are still pockets of the city where property prices have been rising.

The biggest price increases were recorded in Sydney’s fringe areas and new growth corridors, where home values shot up by more than 30 per cent over the past year, PropTrack data revealed.

Top growth suburbs included Austral, in the southwest, The Gables, a new estate in the northwest, and Bundeena, a suburb on the edge of the Royal National Park in Sydney’s south.

Other suburbs with substantial growth were Central Coast enclaves North Avoca and The Entrance and Barden Ridge, another southern suburb on the outer fringe of the Sutherland Shire.

Much of the explosive growth in these areas occurred in recent months when aggressive interest rates hikes by the Reserve Bank of Australia sparked a downturn in much of the rest of the market.

Elise Harrison, with kids Ella, 1, and Lila, 4, has just sold her Kensington home. Picture: Sam Ruttyn

SYDNEY SUBURBS BUCKING THE REAL ESTATE DOWNTURN

PropTrack’s latest monthly home price index showed property values across Sydney as a whole have dropped an average of nearly 4 per cent since February.

Experts said some outer suburbs defied the wider market downturn because of a mix of larger homes, improved infrastructure and the perception of better value for money luring new buyers.

The resulting competition for properties put pressure on buyers to offer higher prices.

PropTrack economist Angus Moore said some cheaper outer suburbs were recording rises in prices precisely because interest rates were rising.

“Buyers can’t borrow as much as they could have last year. With a smaller budget, some may be considering purchasing in a cheaper area where their money goes a bit further,” Mr Moore said.

He added that there was also a tendency for buyers who worked remotely to seek out larger homes in areas further away from the CBD.

“The trend has been slowing since last year, but it’s still happening,” Mr Moore said.

“There would be buyers who don’t need to be as close to the city as they would have before, so they’re going to an outer suburb.

“They are prepared to pay more if the home is exactly what they want, because finding a home that ticks all the boxes can be long and time consuming process.”

Fewer middle- and inner-ring suburbs recorded price rises over recent months, but those that did, tended to have a lower supply of available housing, especially family-friendly houses on larger blocks.

Balgowlah Heights, a tightly held pocket of the northern beaches, had the biggest annual rise in prices for an area within 15km of the CBD, at 35 per cent.

Other city pockets where freestanding house rarely come up for sale such as Artarmon, Willoughby and Lane Cove North had rises of 26-32 per cent. Nearby suburbs such as Roseville Chase, Castlecove and Castlecrag recently had record sales.

McGrath agent Craig Ireson, who recently sold multiple north shore houses for record prices, said some affluent middle- and inner-ring suburbs were still in high demand because the buyer demographic in these areas weren’t affected by interest rate rises.

“Some buyers don’t need a mortgage,” he said.

Bundeena was one of the top growth suburbs.

Veteran agent John Cunningham, former president of the Real Estate Institute of NSW, said there was a bump in general listings in most areas in recent months, but “quality stock” remained in short supply.

He said buyers wanting the best homes – level properties on leafy, quiet streets in good school catchments – would still face strong competition from rival home seekers.

“These types of properties rarely come up for sale, they’re what most buyers are looking for and that creates competition,” he said.

Mr Cunningham said it was the opposite for houses on busy roads or with other features considered a “compromise” for buyers: they tended to be difficult to sell without dropping the price.

‘SECRET SYDNEY SUBURB’ LURES NEW BUYERS

Kensington resident Elise Harrison has noticed her suburb get increasingly popular in recent months and has observed that local rents and prices have continued to grow.

The doctor and mum of two is selling her home of two years to pursue a work opportunity in Melbourne and said that she felt like Kensington was a “secret suburb” that had just been discovered.

Ms Harrison said she was hoping to find a similar suburb to Kensington in Melbourne. Picture: Sam Ruttyn

“We’ve noticed an increasing number of young families moving into the area – I often hear patients say they are paying more for rental units and apartments,” she said.

Dr Harrison purchased her 664sq m property on Lenthall St in 2020 for $3.17m and sold it earlier this week via Ray White Touma Group agent Roger Wardy, for an undisclosed price.

“We live in a very family-friendly neighbourhood where you see kids walking to school every morning and parents with prams in the afternoon,” Dr Harrison said.

“When we move down to Melbourne later this year, we basically want the exact same thing.

“You can enjoy living near the city while also enjoying the tranquillity of the surrounding area.”

Don’t miss our special Spring Market Report in the Saturday Telegraph this Saturday August 27 and in The Sunday Telegraph this Sunday August 28 and online.

Originally published as Sydney, NSW’s highest price growth suburbs revealed: why these areas are bucking the real estate downturn