Sydney has emerged as the powerhouse of Australia’s property market, showcasing robust signs of recovery and a stunning upswing in the real estate sector. As of the third quarter of 2023, Sydney reigns supreme as the strongest property market in the nation, defying the challenges of rising interest rates and high inflation. It appears that these economic headwinds have had little impact on the enthusiasm of buyers and investors in the city’s real estate sector.
An impressive 82% of suburbs across Greater Sydney have reported solid transaction numbers, signifying widespread growth and investment activity. The city’s fightback began in the second quarter of 2023, but it is the third quarter that has witnessed a resounding victory for Sydney’s property market. The upsurge in the Greater Sydney market is not confined to a single region. It stretches across the metropolitan area, encompassing the thriving Sydney City market, as well as areas like Woollahra, Waverley, the Inner West, Canterbury-Bankstown, and Sutherland Shire, and western precincts like Blacktown, Parramatta, Liverpool, and Penrith. This broad-based resurgence in the property market indicates a city-wide revival in property prices.
Median dwelling values in Sydney have been on an eight-month consecutive rise since February 2023, with the median house value increasing by an impressive 10.9% to reach $1.3m. The median unit value is also up by 7.5%, standing at $829K over the same period. The apartment market, in particular, has witnessed a resurgence in demand and price growth, with thousands of apartments changing hands in the past 12 months. The data clearly indicates that Sydney is leading a national revival in property prices, outpacing its own performance during the 2021 boom.
Let’s have a look at some of the standouts.
The Inner West precinct remained steadfast, thanks to its secret weapon—relatively affordable apartments. Even during challenging times, buyer demand for units in this area remained strong. What sets the Inner West apart is its strategic location at the confluence of major transportation projects and access to top-tier medical facilities. This makes it an ideal location for those seeking affordable apartments near the heart of the city. The precinct is on the brink of transformation, with the proposed Bays West innovation hub and new train station as part of the Sydney Metro West project. These developments are set to further enhance the appeal of the Inner West.
The Royal Prince Alfred Hospital is a major teaching hospital and medical precinct. Currently undergoing a significant redevelopment. It has affordability of its apartments, significantly lower than those in neighboring suburbs – combined with strong job opportunities. The potential for growth and development in this Local Government Area makes it a worthy investment.
The City of Blacktown
Blacktown has become a sought-after destination for homebuyers and investors. As one of the most populous Local Government Areas (LGAs) in New South Wales, its popularity can be attributed to the thriving economy of the region, driven by major infrastructure projects and investments, especially in commercial-industrial industries. The anticipation is building with the forthcoming Western Sydney International Airport, set to open its gates in 2026. Alongside this, the Aerotropolis precinct is expanding, offering a plethora of job opportunities and further boosting the local economy. Road, rail, and medical projects are also contributing significantly to the economic and population growth in the City of Blacktown. Despite a slight softening in price growth in 2023, the property market has consistently performed well since 2018, underlining its stability and attractiveness to investors. What sets Blacktown apart is its relative affordability compared to Greater Sydney. With long-term capital growth rates averaging 5-6% per year and vacancy rates below 1% in most local postcodes, Blacktown offers opportunities for property buyers and investors.
The City of Parramatta
Parramatta has emerged as a thriving economic hub. With a Gross Regional Product (GRP) of $28 billion in the fiscal year 2022, it has solidified its position as the second-largest economic contributor in the region. The success story of Parramatta is set to continue, propelled by ongoing major development projects. The Sydney Metro and Parramatta light-rail projects, in particular, are poised to enhance connectivity to the Sydney CBD. The completion of the $3.2 billion Parramatta Square redevelopment in 2022 has been a game-changer.
The City of Parramatta Council plans to maintain this momentum by investing approximately $615 million in various projects and services in the fiscal year 2024, including construction works amounting to $286 million. There’s the promise of abundant job opportunities, courtesy of the construction of Sydney’s second airport and the associated Aerotropolis manufacturing and logistics hub. The availability of affordable apartments in high-rise buildings has fuelled demand within the City of Parramatta. The area’s focus on high-density developments, including build-to-rent projects, has positioned it as a strong and resilient market within Greater Sydney.
In 2022, Sydney’s property market faced a downturn, causing concern among homeowners and investors alike. And of course panic and fearmongering in the media. However, the dawn of 2023 brought a ray of hope as the market began showing promising signs of recovery. Sydney’s property market is on a remarkable journey, showing resilience and strength, despite external economic challenges. Its status as the nation’s strongest property market reflects the city’s desirability and enduring demand for real estate investments.