A report by Shore Financial has analysed Sydney suburbs and given their assessment on the suburbs ready for growth heading into the spring season.
A new State of Sydney Report by Shore Financial has identified the Sydney suburbs they expect to see the biggest growth returns in the next six months.
Each quarter, the Shore Financial report analyses data from over 600 suburbs across Sydney and arranges them into quintiles based on median house prices and identifies the regions they anticipate to see the highest growth over the next six months.
The five quintiles are:
Quintile 1 - Heartland Sydney
Quintile 2 - Suburban Sydney
Quintile 3 - Rising Sydney
Quintile 4 - Professional Sydney
Quintile 5 - Affluent Sydney
Shore Financial CEO Theo Chambers said the forecasts from the report released in February had turned out to be quite accurate.
“The forecasts held up very well in the Heartland Sydney, Suburban Sydney, and Rising Sydney suburbs – the three lower-priced quintiles – as the firm levels of demand we anticipated played out, in part due to the interest rate cuts in February and May,” Chambers said.
“However, there were some discrepancies in the Professional Sydney and Affluent Sydney suburbs – the two higher-priced quintiles – which underperformed the forecasts, likely due to affordability pressures.”
Chambers said that while some analysts were expecting very strong growth rates throughout greater Sydney over the next six months, Shore Financial was predicting a much more nuanced picture of growth for the region.
“In some suburbs, growth rates are highly likely to exceed 5 per cent for the next half-year, putting them on track for double-digital annual growth rates,” Chambers said.
Chambers said that many of those suburbs have low levels of inventory that will lead to buyers having to bid hard to secure their purchase.
While in other areas of Sydney, Shore is predicting prices to stagnate, and in some cases even regress, with affordability and higher levels of supply being the driving factor.
Chambers said that further rate cuts in 2025 would continue to put upward pressure on prices, but would not lead to the rampant growth seen in 2021.
“If interest rates fall further in 2025, buyers’ confidence and borrowing power will increase, which should lead to a rise in demand,” Chambers said.
Chambers said that “buyers don’t have unlimited cash to spend”, making reference to Australian Bureau of Statistics data that showed that wages throughout the country rose by 14.4 per cent while prices rose by 19.2 per cent, effectively counting as a pay cut for the average Australian in inflation-adjusted terms.
“In other words, Sydney buyers are facing affordability constraints, which will put a ceiling on any near-term growth,” Chambers concluded.
Randwick
Median house price: $3.4 million
Growth over past 12 months: 5 per cent
Forecast growth over the next six months: Over 5 per cent
Dee Why
Median house price: $2,822,200
Growth over past 12 months: 5 per cent
Forecast growth over the next six months: Over 5 per cent
Wheeler Heights
Median house price: $2,310,000
Growth over past 12 months: 5 per cent
Forecast growth over the next six months: Over 5 per cent
Mount Annan
Median house price: $1,139,000
Growth over past 12 months: 7 per cent
Forecast growth over the next six months: Over 5 per cent
Whalan
Median house price: $835,000
Growth over past 12 months: 6 per cent
Forecast growth over the next six months: Over 5 per cent
Mount Druitt
Median house price: $1,010,000
Growth over past 12 months: 6 per cent
Forecast growth over the next six months: Over 5 per cent
North Narrabeen
Median house price: $1,979,500
Growth over past 12 months: -1 per cent
Forecast growth over the next six months: Over 5 per cent
Kurnell
Median house price: $2,214,800
Growth over past 12 months: 4 per cent
Forecast growth over the next six months: 4–5 per cent
Miranda
Median house price: $1,900,000
Growth over past 12 months: 4 per cent
Forecast growth over the next six months: 4–5 per cent
Carlton
Median house price: $1,880,000
Growth over past 12 months: 4 per cent
Forecast growth over the next six months: 3–4 per cent
You are not authorised to post comments.
Comments will undergo moderation before they get published.