The Sydney suburbs where property prices fell most in 2023

Sydney’s property prices have increased overall this year, but there were a handful of suburbs where the market bucked the trend in the last 12 months.

Bundeena topped the list with a 5.9 per cent drop in house prices. It was followed by just five other suburbs that recorded price declines, including Wentworth Falls (down 1.4 per cent) and Caringbah (down 1.1 per cent).

There were more suburbs where unit prices fell. Marsden Park posted the biggest unit decline of 4.3 per cent, followed by The Entrance North (2.8 per cent) and then Wyoming (2.2 per cent).

Research house CoreLogic found the pandemic trend of people searching for more space and living further from the metro area meant some outer-fringe suburbs that saw strong growth 12 months ago were now underperforming.

“This is perhaps a reflection of people that have bought into some of these markets through the pandemic, maybe were looking to get out of the cities,” research director Tim Lawless said.

“The common denominator here is each of these top four, top five are very much outer-fringe suburbs across the Sydney metro.”

Lawless said the high representation of units in the data could also be a legacy from the pandemic as people remain attracted to space, preferring to invest in a detached house.

Before the pandemic, the Central Coast was not as popular due to the travel time to the city and so it was a very affordable market, he said. Demand grew a few years ago, then waned.

“But as more people were empowered to work remotely and people were looking for space – houses rather than units – areas like the Central Coast, as well as getting further south towards say Wollongong, Sutherland’s another good example, the outer west, you’re getting out to the Blue Mountains – were all very popular markets,” Lawless said.

“In the last 12 months, it hasn’t really been the case. The market in Sydney has really been led by more sort of inner and middle-ring suburbs showing the most significant amount of growth,” Lawless said.

Sydney’s property market defied expectations, but a handful of suburbs did fall in price this year.Credit: Peter Rae

In the Sutherland Shire, Ben Pike from Pulse Property Agents described the suburb of Bundeena as a “very small, remote and low-turnover suburb”.

Bundeena is accessible via a ferry connecting to Cronulla, or a long 40-minute drive around the national park.

It has gone from a rural area with affordable housing a couple of decades ago to a holiday hotspot for the wealthy, he said.

“Palm Beach is obviously unattainable at the minute, and Bundeena is what they’re now calling Palm Beach II.”

In the Blacktown area, Ray White The Tesolin Group’s Panal Boustani said in Marsden Park there is still a lot of development in progress.

There is no train station yet and schools are still being built, Boustani said.

“So because it’s still in early stages of that suburb growth, some people have chosen to just wait a little bit before jumping in. Whereas let’s say if you walk into Blacktown itself, you’ve already got all the amenities set up.”

On the Central Coast, McGrath Long Jetty’s Scott Falconer said The Entrance North is usually a very tightly held suburb.

“But in the past 12 months, there’s more properties for sale in that suburb than I’ve ever seen. Which is good because I’ve always thought of that suburb as a bit of a sleeping giant,” he said.

Falconer said its proximity to the beach, lake and reasonable prices for high-end properties make the suburb a hidden gem.

“There’s a lot of holiday properties in this area.”

Due to the state of the economy, holiday rentals are being listed for sale, creating an opportunity for owner-occupiers to move into a family friendly lifestyle, Falconer said.

AMP’s chief economist Dr Shane Oliver said there will always be some suburbs going in different directions.

“Depending on where they’ve come from and the vulnerability of those suburbs to things like higher interest rates, and whether they’ve benefited or not from high immigration,” he said.

Oliver suspects a major factor could be more debt and vulnerability on a suburban fringe.

“Some suburbs benefited immensely through that [pandemic] period. But didn’t benefit as much in this recent boom. It’s a different demographic.”

Oliver says it’s always possible to have some suburbs struggling, particularly if there are cross currents.

“You got two big forces, one is higher interest rates, and that’s a negative. That would dominate in some suburbs. In other suburbs, they would be benefiting from the higher immigration housing shortfall.”