The Sydney suburbs where home prices soared most last year

The cost to purchase a home in Sydney has jumped to new peaks, with houses in one suburb rising by almost 40 per cent as buyers hunt for affordable options and interest rate cuts increase competition.

Houses in a string of comparatively inexpensive suburbs posted double-digit property growth over the past year, the latest Domain House Price Report showed, as buyers look further afield. About 60 Sydney suburbs recorded house price growth of more than 10 per cent.

South Wentworthville in the Merrylands-Guildford region recorded the steepest house price growth, rising 37.2 per cent in the 12 months to June to a median $1,255,000. This was followed by pricier Cammeray and Sans Souci, up 26.1 per cent and 23.7 per cent respectively.

Still, Long Jetty and Bateau Bay, Central Coast suburbs counted as Greater Sydney, added more than 20 per cent, as did Bankstown in the south-west.

Dr Nicola Powell, Domain’s chief of research and economics, said major transport infrastructure changes, for example the Sydney Metro Southwest, were a demand driver for affordable suburbs.

“I think there is definitely this kind of western swing, which shows these affordable corridors that are benefiting from buyers seeking a better price point, and it’s creating these growth corridors,” she said.

Johnathan McMenamin, Barrenjoey’s head of economic forecasts, said people remained “quite sensitive to what they can borrow,” particularly in more expensive suburbs, but that this was changing in other areas.

“We’re starting to see the early signs of rate cuts in the more affordable suburbs,” he said.

This comes as Sydney’s property market rebounds, with the median house price rising 2.6 per cent in the three months to June to hit a record $1,722,443.

Sydney’s property market has rebounded with the median house price rising 2.6 per cent in the three months to June.Credit: Peter Rae

The two cash rate cuts this year had boosted confidence and borrowing capacity, with the market anticipating another cut in August, Powell added.

For units, homes in prestige areas made solid gains over the past year, as some buyers sacrificed space for location.

Forest Lodge in Sydney’s inner-city rose the most over the year, adding 31.6 per cent to hit a median of $1,225,000. This was followed by Kingswood, in the Penrith area, which jumped 24.4 per cent. The prestige coastal suburbs of Darling Point, Milsons Point and Rose Bay surged 23.4 per cent, 18.9 per cent and 18.2 per cent respectively.

The cost to buy a unit in Rose Bay jumped by almost 20 per cent over the past year.Credit: Louise Kennerley

“These are elite suburbs, but actually the unit price point opens up the buyer pool because it is a much cheaper price point relative to what a house would be in these locations,” Powell said.

Megan Sayers, 40, who works in HR, said increasing rents, falling interest rates and a closing window for her to use the First Home Guarantee Scheme were a push to accelerate her search process earlier this year.

Sayers bought her first property, a one-bedroom apartment in the apartment-dense southern Sydney suburb of Wolli Creek where unit prices are at a median of $788,000.

First home buyer Megan Sayers expanded her search from Sydney’s inner-city in her property search.Credit: Nick Moir

After spending part of her thirties living and working overseas and returning to Australia from Japan in late 2018, Sayers feared she had missed the boat and may struggle to buy on a single income.

“I never thought I would own a home,” she said.

But after saving for five years, getting professional help and expanding her search area beyond inner Sydney, Sayers got the keys to her apartment in July.

“I had a good cry when I exchanged because I was just so excited that it finally happened. And I guess I just wake up every morning feeling so fortunate.”

Wolli Creek is a high-density residential area a 20-minute drive from Sydney’s CBD. In the year to June, 344 apartments sold in the suburb, but prices rose just 0.5 per cent, on Domain data.

Some other suburbs with solid unit sales also recorded close to stable price growth or even declined. For example, unit prices in Zetland (393 units sold) and Rosebery (356 apartments sold), both in the inner city, fell 3.4 per cent and 0.5 per cent respectively over the year, underscoring how density can dovetail with affordability.

Sayers’ mortgage broker, Alcove national first home buyer specialist Jack Elliott, said the rate cuts were giving first home buyers confidence, with many clients considering homes on Sydney’s outskirts.

“They’re finding that unit, or that little townhouse, or it might even be further out to find a house that suits them and their needs for the future,” he said.

Ray White Merrylands managing director Michael Azzi said the shortage of property for sale in South Wentworthville had helped to push up prices there.

“There’s a section that’s all virtually townhouses and duplexes, and there’s a lot of them, and then there’s a section that there’s some very large homes and very big blocks of land. And together they are sort of booming,” he said.