Next boom: the Western Sydney suburbs set for real estate price spike due to ‘ripple effect’

Pockets of Western Sydney are set for another surge in home prices due to better value, improving transport and listings shortages. See which suburbs will have the biggest rises

Sydney’s housing boom has spread to the city’s far west and a range of once overlooked suburbs are set to become the next boom areas.

It comes as housing pundits warned the extended lockdown has yet to dampen the enthusiasm of hopeful homebuyers.

Many have been looking to new areas for properties after being priced out of much of the rest of the city and suburbs west of Parramatta have been growing in popularity.

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Sales data showed there were many western pockets where a combination of better value, improving transport links and low listings volumes indicated impending price increases.

The suburbs included a mix of locations in the Greater Penrith area, including South Penrith, Claremont Meadows, Springwood, St Marys and Rooty Hill, according to the Select Property Group research.

There were also a cluster suburbs in Sydney outer southwest set for rapid house price rises, including Narellan, Ingleburn, Macquarie Fields and Bradbury.

These suburbs tended to be, on average, about $50,000-$300,000 cheaper than neighbouring suburbs. Buyers also outnumbered sellers and competition for property was high.

Select Property research director Jeremy Sheppard said the ratio of supply to demand in these areas and price differences between neighbouring suburbs showed a “ripple effect” would push up prices.

“As people get priced out of other markets they start looking for cheaper alternatives and that’s when there is catch up, areas that may have lagged with price growth start to grow,” he said.

This pattern was playing out across Sydney – the regions with the fastest growing prices earlier this year were middle and inner ring suburbs but that growth has begun to slow in recent months.

St Marys residents Scott and Kelly Watson, with kids Riley and Trey, are selling their house on Brock Ave. Picture: Toby Zerna

Eastern suburbs prices jumped by an average of about 18 per cent, or $248,000 over the past year, while north shore prices increased 15 per cent, or $190,000, CoreLogic data showed. Prices rose 21 per cent, or $281,000, in the Hills district.

“Buyers don’t just start paying a quarter of a million dollars more, they start to look where their money goes further, even if it’s not where they originally wanted,” Mr Sheppard said.

Ray White-St Marys director Peter Diamantidis said there was an already an influx of out of area homebuyers and investors streaming into the area around western suburb St Marys.

“Many of them are coming from places like the inner west when they realise how much (cheaper) it is,” he said.

“We also have a lot of investors who have started buying, some of them sight unseen. Investors tend to follow other investors, so we’re expecting more to start buying.”

Western Sydney suburbs where the ripple effect could increase prices.

St Marys residents Scott and Kelly Watson, who are selling their house on Brock Ave, said out of area families were often surprised by how much the area had changed.

“It was a sleepy quiet town when we moved in 13 years ago,” Ms Watson said. “Now it’s all younger families moving in, kids are playing on the street. The main road is full of cafes, it’s growing quickly.”

Ray White-MacArthur group director Daniel Maurer said there was a similar trend in Ingleburn in the southwest.

“We are getting a lot of demand from out of area first homebuyers and its starting to put pressure on prices,” he said. “We are getting that interest because the area is more affordable and the train line makes it easily accessible.”

Auctioneer Michael Garofolo. Picture: Sam Ruttyn

Cooley Auctions partner and auctioneer Michael Garofolo said buyers who were priced out of one suburb often went to new, cheaper suburbs with the same budget.

They also tended to be more aggressive at auctions because they had missed out on previous opportunities and wanted to do whatever they could to end their home search quickly, Mr Garofolo said.

Originally published as Next boom: the Western Sydney suburbs set for real estate price spike due to ‘ripple effect’