John McGrath’s hot suburbs for 2025: bargains at the lower end as prices drop

The once-in-a-generation combination of housing affordability and working from home has sharply affected residential property markets. Here are John McGrath’s tips for where to win.

Baby boomers Paul and Tracey Schneiders are selling their sprawling five-bedroom Haberfield house in Sydney’s inner west ahead of a permanent move to a Northern Rivers township. Picture: Max Mason-Hubers

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The once-in-a-generation combination of housing affordability and working from home has sharply impacted residential property markets, which have suffered a 7 per cent price drop at the lower end.

Releasing the annual McGrath Report 2025, celebrity real estate agent John McGrath said the lower end of Sydney’s market has softened with a recent correction of 6-7 per cent in value.

“There is value buying while investors stay away. But the top end is strong, where people are buying with cash and paying extraordinary prices,” said the McGrath Estate Agents founder and chief executive, adding that the middle market could go either way.

“We saw a pullback in buyer activity six weeks ago driven by a combination of more listings plus cost-of-living pressures, which is creating a burden with people gasping for relief.”

Mr McGrath said there would definitely be a positive buyer response if there was a drop in interest rates, adding however “that a quarter per cent rate relief for most people will not take a lot of the pain away”.

Mr McGrath added that any easing in interest rates would bring an emotional reaction: “The next weekend would see a positive response.”

The work-from-home phenomenon has scuppered the popularity of open-plan living, with people asking architects such as Adam Haddow for less open space and more privacy in their homes to make zoom work calls for instance.

Mr Haddow, a director of SJB architecture, sees this as the death of the “open plan”.

Gardens are also becoming somewhat of a luxury.

“Garden is the new luxury – it is less about how much house you have and more about how much garden you can enjoy,” Mr Haddow said.

Meanwhile, according to Mr McGrath, affordability and lifestyle are also driving people to the NSW Central Coast, as well as buying cheaper units over houses, building granny flats in their backyards, and sharing with parents.

“It’s bringing massive changes, it’s the beginning of a new era,” Mr McGrath said.

McGrath Estate Agents founder and chief executive John McGrath.

After reassessing their lifestyle, baby boomers Paul and Tracey Schneiders are selling their sprawling five-bedroom Haberfield house in Sydney’s inner west ahead of a permanent move to a bucolic Northern Rivers township.

For Mr McGrath, the Schneiders’ relocation, some 661km north up the coast from Sydney, is a “serious seachange”.

The Schneiders have purchased acreage on the Clarence River, downsizing from their 120-year-old Federation house in Stanton Road, with the house to be auctioned through McGrath agent Michael Tringali on November 16.

“We have a big Federation house in Haberfield, we don’t need it any more,” said Paul Schneiders, who recently retired.

“We have been there 29 years … being on acreage near Yamba we have made friends with the neighbours and it costs a lot less to run.”

Paul and Tracey Schneiders at their Haberfield home, which they are selling in a ‘serious seachange’. Picture: Max Mason-Hubers

The McGrath Report 2025 notes that downsizing from the family home to one with less upkeep has become a viable consideration for those born between 1946 and 1966.

While some baby boomers have found it difficult to downsize to the type of home they want in the city, others, like the Schneiders, are more than happy to move to a rural area.

Still other baby boomers are flocking to the coast with the report noting that half of Australia’s population resides within seven kilometres of the coastline.

More people moved to the NSW Central Coast and fewer people left than any other in the Greater Sydney region each year since 2019.

Take Anthony Albanese and his fiancee Jodie Haydon. The couple recently paid $4.3m for a cliff top mansion in the NSW Central Coast township of Copacabana.

Mr McGrath said the two-storey mansion, which sold in 2021 for $4.65m, would cost $20m in Sydney’s trophy markets.

“The Central Coast is a beautiful area, with beautiful lakes and beaches and it’s 60 minutes from Sydney,” said Mr McGrath, whose agency negotiated the deal with the Prime Minister.

Anthony Albanese's newly purchased residence in Copacabana, NSW. He picked it up for a steal – $300,000 less than the $4.65m the current owners paid for it when houses were achieving top dollar during the Covid lockdowns.

McGrath Central Coast principal Mat Steinwede said the Central Coast’s proximity to Sydney is a drawcard for those moving to the sprawling area, adding that he has been inundated with inquiries from potential Sydney buyers who are planning a move.

“Although the population is growing and the housing market remains tight, the idyllic coastal village feel with the local cafe on the beach hasn’t been lost,” he said.

“For those aspiring to live on the absolute waterfront and have a boating lifestyle, the Central Coast remains within reach and about a third of the price you would expect to pay in Sydney.”

One of McGrath’s top picks this year is the Central Coast hamlet of Long Jetty. “This sleepy little beachside village was up until fairly recently ‘somewhat unfashionable’ if you can believe it.”

Mr Albanese’s property in Copacabana, NSW.

But Mr McGrath now says it’s a jewel in the crown offering some of the best value on the east coast, allowing people to work from home and commute to Sydney.

Three-bedroom houses are on the market for about $1.1m while modern apartments retail at about $630,000.

He also likes St Kilda East in Melbourne, for its good schools, parks and transport at its doorstep. In regional Tasmania, he likes the tiny seaside hamlet of Primrose Sands, midway between Hobart and Port Arthur, because it is emerging as a gentrifier hotspot.

In Queensland, he likes Caloundra West because it is less expensive than nearby Caloundra. “The suburb’s location close to the coast, and the new Stockland Aura development, makes it an appealing lifestyle choice.”

John McGrath’s hot suburbs for 2025

Sydney

Summer Hill/Dulwich Hill

In the ever-groovier inner west and, with the light rail, a short tram ride into the CBD. Also has some of the best coffee in Sydney

Glebe

A five-minute stroll to the city, Sydney University, UTS, Darling Harbour and Broadway Retail. This sleeping giant is about to awaken

Millers Point

Unbeatable spot with easy access to city life. Subdued price growth during the Covid years has created good buying opportunities today

Eastlakes

A vibrant mix of multi-cultural groups resembling Paddington and Surry Hills in the 1980s. Offers upgraders the opportunity to buy a house for under $2m

Bardwell Park

If you play golf, it has a course. If you work in the CBD, it’s a few stations away. And if you like a strong long black you can take your pick of emerging cafes

Regional NSW

Long Jetty, Central Coast

This sleepy little beachside village, until fairly recently ‘somewhat unfashionable’, remains some of the best value on the east coast. Work from home and commute to Sydney a couple of days a week

Melbourne

Keilor East

Set to get a new train station as a part of the Airport Link. Has all the charm and lifestyle of Essendon with a much lower price tag

St Kilda East

Leafy streets and art deco-style homes and apartment blocks, but still just a short tram ride into the heart of St Kilda. Ideal for investors, downsizers and first home buyers alike

Glen Waverley

With Monash and Deakin universities close and a plethora of restaurants, shops and transport options it doesn’t need to be close to the city. Could be poised to be another job hub

Altona North

With the West Gate Tunnel due for completion next year, the west will be more connected than ever to the CBD and the rest of Melbourne. Less pricey than its waterside neighbours

Regional Victoria

Spring Gully

On the edge of Bendigo, it combines the best of both city and country living. And the suburb is set for a boom, thanks to plans for a new housing development, school and general store.

Brisbane

Springwood

Young professionals and families are moving in; Baby Boomers are moving out. Mix of convenience, housing options and attractions such as a 36ha conservation park. Expected to remain popular

Forest Lake

Brisbane’s first master-planned community when built in the early 1990s. Centred around a man-made lake, properties here offer more bang for your buck than in the inner city

North Ipswich

The historic suburb is set to benefit from improved Olympic public transport and infrastructure. A great place to nab a Queenslander at a fraction of the price you could expect to pay closer to town

Regional Queensland

Caloundra West, Sunshine Coast

Has long played second fiddle to Caloundra but buyers are taking an interest in Caloundra West’s less expensive housing

Townsville, North Queensland

Savvy sea changers are snapping up properties here. Prices are still on the lower side compared to many other parts of Queensland and gross rental yield is among the highest in Queensland

Hobart

Kingston

Famous for its beach but residents can reach the city centre in just 10 minutes. Huge amount of land still available for development, Kingston is primed for growth

North Hobart

Cool and vibrant suburb. The predominantly older-style housing stock has been injected with new life recently thanks to luxe developments such as The Rox which will lift the suburb’s profile

Regional Tasmania

Primrose Sands

Tiny seaside hamlet historically known for affordable housing, now emerging as a gentrifier hotspot. Known for its beautiful beach, predicted to take off in coming years

Legana, Launceston

Semi-rural hub only a 15-minute drive into town. Completion of the 350-place Legana Primary School for the 2025 school year will attract young families

Latrobe, Devonport

Plenty of land releases and development in the past decade make this semirural pocket one to watch. Could prove a happy investment, particularly for first home buyers