Real estate boom: Sydney regions with steepest price rises during Covid-era

Sydney’s housing boom has lifted up prices in nearly every corner of the city but the rises were especially pronounced in three city regions, sales trends from the past year showed.

Sydney’s coastal regions and outskirts have led the city’s unprecedented housing boom amid a Covid-era scramble for “lifestyle” homes on bigger blocks.

Prices across the city rose by an average of 15 per cent over the past financial year but growth was much higher on the northern beaches, Central Coast and the northwest, market analysis showed.

Prices on the Central Coast and northern beaches climbed 24 per cent for the year, while in the Hills and Hawkesbury region the increase was 21 per cent.

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The rises meant home buyers in some of these regions were now paying up to $400,000 more, on average, than purchasers last year.

The Southern Highlands and Shoalhaven region had an even bigger rise at 26 per cent, according to the CoreLogic research.

To give these numbers some perspective, the average annual rate of price growth across Sydney over the past decade was about 5 per cent.

Buyers have outnumbered sellers in most areas over the past year. Picture: Julian Andrews

CoreLogic head of research Eliza Owen said the runaway growth in prices last year was primarily driven by “changeover” buyers who were upsizing or downsizing.

Others were capitalising on work from home arrangements to seek a “tree-change” or “sea-change”, she said.

The stellar growth on the northern beaches meant it pulled further ahead of the city’s east and lower north shore as the most expensive market to buy a property.

The median price of properties in the region, based on sales data for houses, units and townhouses, was $2.1 million in June, up from $1.7 million last year.

Properties in the eastern suburbs cost an average of $1.6 million in June, while north shore properties cost $1.5 million – luxury properties and mansions in these markets remain pricier.

Housing experts said the beaches rise as the most expensive market was the result of a crippling housing shortage at a time when its appeal was broadening.

“Everyone wants to come here now,” local Stone Real Estate agent Eddy Piddington said.

“(The beaches) have always been known as a great place to live but it was seen as less accessible. That’s not as much of a problem anymore because people aren’t going to the office as much.”

There was a similar trend on the Central Coast, where families seeking out biggest homes closer to the coast dragged the median price up from $660,000 to $818,000.

The rapid growth in many regions has prompted some economists and housing market observers to warn the market may soon peak.

Nearly 60 per cent of the real estate pundits and economists polled in a recent survey by comparison site Finder.com.au said the market would peak before the end of the year.

Housing experts who forecast a peak in late 2021 included NAB chief economist Alan Oster and Griffith University economics professor Tony Makin, among others.

Those who saw the peak coming sooner included University of Western Australia macroeconomist Jakob B. Madsen and Macquarie University professor Jeffrey Sheen.

Sydney’s previous market peak was back in mid-2017 and was followed by a two-year period of falling prices in which the median dropped nearly 15 per cent.

The experts were divided on many of the reasons for the coming peak but one common belief was that housing was becoming unaffordable.

Originally published as Real estate boom: Sydney regions with steepest price rises during Covid-era