Top Sydney suburbs for migrant buyers, renters revealed

Renewed demand from international renters and property buyers has been putting pressure on prices in parts of Sydney. See the top suburbs for foreign buyers and renters

Foreign demand for housing has quadrupled in some Sydney areas over the past year and is expected to drive up already soaring rents even further while keeping a floor under falling property prices.

PropTrack data has revealed there has been a renewed foray from overseas-based home seekers into the Sydney housing market this year, especially within suburbs in the city’s inner south.

Most were searching rentals or property listings ahead of a move to Sydney.

Overseas-based demand for rentals in Rosebery, Zetland, Waterloo and Haymarket increased by more than 200 per cent over the year. Ultimo, Mascot and Kingsford had increases of 180-190 per cent.

And the most popular suburb for overseas-based searchers of rental listings was the Sydney CBD, followed by Surry Hills and Manly.

Peter Li and Fiona Yang of Plus Agency, have been showing Chinese buyers properties while they have been over on holidays during Lunar New Year. Picture: Tim Hunter.

The increased demand put pressure on rents that were already surging because of a rental shortage and increased local demand.

And with that pressure, the average cost of a Sydney rental is up nearly 30 per cent compared to early 2022.

The CBD and Manly were the most searched suburbs for property sales, followed by Mosman, Chatswood and Epping.

Kensington and Kingsford had the biggest increases in overseas searches, which rose 54 per cent. Lakemba, Newtown and Haymarket were also high growth areas.

Increased demand from overseas based buyers was one of the reasons prices have fallen by a smaller margin than recent reductions in borrowing capacity brought about by interest rate hikes.

Prices dropped an average of 7 per cent annually while borrowing capacity has shrunk nearly 25 per cent since the first rate rise in May.

A newly built unit at 2 Oliver Rd, Chatswood NSW sold for $2.45m to a foreign national in 2023. .

Housing experts said overseas interest in the market was ramping up due to an unprecedented mix of global forces.

They included an exodus from mainland China following the Chinese government ceasing its zero Covid policy, which had restricted movements out of the country.

International instability, rampant global inflation and the Ukraine War were also leading global investors to safe havens such as Australia.

Expats were driving the increase too, with a rising number of Aussies returning from offshore since international borders were reopened last year.

Meanwhile, international student numbers are returning to pre-Covid levels.

“The increase in search activity from overseas property seekers coincides with the return of migrant workers and students to our shores,” said PropTrack analyst Karen Dellow.

25A Ford Street North Ryde, a newly built duplex, has been attracting inquiries from foreign nationals.

The leading sources of overseas buyer inquiries were primarily English speaking countries, with the US, UK and New Zealand making up the top three countries for searches of property sales.

Asian countries accounted for most of the rest of the demand, with significant search activity coming from Hong Kong, Singapore, the Philippines, mainland China and India.

The same countries were also the top source for inquiries on rental housing.

Overall offshore searches for rental properties on realestate.com.au increased 71 per cent over the past year, while foreign searches of properties for sale increased 10 per cent.

Mortgage Choice broker James Algar said the Covid experience in previous years was likely driving migration levels up and encouraging Aussie expats to return home.

“There’s been a big uptick in expats returning home and wanting mortgages,” he said. “They saw out the worst of Covid overseas and going through that has made them want to get back here.”

This new apartment building at 20 Nancarrow Ave, Meadowbank has been popular with foreign buyers.

Property search platform Juwai IQI noted Mandarin-speaking inquiries on NSW listings were now up 9 per cent on 2018 levels.

Plus Agency CEO Peter Li said he expected more Chinese buyers and renters to stream into the market this year.

Mr Li was giving property tours for Chinese visitors during Lunar New Year and said demand was the highest he has seen in years.

“New duplexes are very popular,” he said. “A lot of Chinese buyers want a land component because you cannot own land in China … almost 100 per cent of the buyers who came to look at properties here over Chinese New Year wanted something to live in.”

Under current Foreign Investment Review Board rules, foreign nationals without permanent residency are restricted to purchasing only new properties.

“Some Chinese buyers don’t want to rent, they’ll just buy as soon they get here. A typical budget will be $1m-$2m,” Mr Li said.

Mr Li said Sydney was only seeing the beginning of the demand surge from China. “After Covid zero and the massive Covid outbreaks in China, Chinese are coming here to escape.”

MOST POPULAR SUBURBS FOR OVERSEAS BUYERS

1. Sydney

2. Manly

3. Byron Bay

4. Mosman

5. North coast

6. Chatswood

7. Epping

8. Bondi Beach

9. Paddington

10. Surry Hills

MOST POPULAR SUBURBS FOR OVERSEAS RENTERS

1. Sydney

2. Surry Hills

3. Manly

4. Parramatta

5. Bondi

6. Randwick

7. Chatswood

8. Coogee

9. Zetland

10. Chippendale

Source: PropTrack

Originally published as Top Sydney suburbs for migrant buyers, renters revealed