Sydney Suburbs You Should Consider Buying In Now

Sydney is one of the most popular places in Australia to purchase a property, and for good reason! The city is constantly growing and changing, with new suburbs popping up all the time.

Are you looking to purchase a property in Sydney? If so, you’ll want to read this article!

We have reviewed house prices in Sydney over time and particularly the large price changes over the last year or so. We’ve looked in great detail, into the causes of these changes and made a forecast for the near future.

Finally, we’ve outlined the suburbs in Sydney where you should be thinking about buying right now. With the city constantly growing and changing, these suburbs are sure to be a great investment. What are you waiting for? Read on to find out more!

Property prices in Sydney

Generally, property always increases in value. Despite fluctuations and temporary ups and downs, house prices increase in the long term.

An article published by savings.com.au reviewed the changes in house prices in Sydney over the 50 years since 1970, with the following conclusions:

 

  1. House prices in Australia are at an all-time high. An average house costs about 5 times more than it did 50 years ago, which means the $1 million (give or take!) sale price for Sydney houses today would buy you 5.2 homes back then! The trend is similar, but not as extreme, across other major cities.
  2. Sydney house prices have increased far more quickly than incomes. The average Sydney house cost 4.5 times pre-tax income in 1970, but this number has skyrocketed to 12.2 times pre-tax income nowadays.
  3. The increase in property prices doesn’t seem to be entirely influenced by population growth. The population of Sydney has grown by 70% over the last 50 years, but its house prices have increased by 520%. In contrast, Perth’s growth rate is roughly 300%, yet residents are experiencing an inflation-corrected price increase of only 260%.

The study suggests Sydney property is an excellent place to invest your hard-earned wages for almost guaranteed long-term capital growth.

Recent changes in Sydney property prices –

The extraordinary events of the last few years have had a major impact on the housing market:

COVID-19

In March 2020, Australian health authorities reported an outbreak of the Coronavirus. The virus had been rampant across China and Europe before reaching our country but within months most regions were under some form of lockdown to prevent its spread. This included working from home or social distancing yourself if you thought you may be ill to avoid other people getting infected too!

Demand for building work

The Australian housing market experienced a mini-boom during the period when most people were in lockdown.

New homes boom

The Home Builder Grant was introduced, by the Australian Government, in 2020, and it gave people who signed contracts to build a new home during this time period an opportunity for some major savings.

The ABC News organisation reported over 137 thousand Australians took advantage of these incentives which caused massive growth for the construction industry.

Low interest rates

With lending interest rates at historic lows across Australia there had never been more motivation to buy a property.

House prices had increased dramatically and yet sales were extremely busy and there was a “fear of missing out” (FOMO) atmosphere among people desperate to buy property.

2022 – a perfect storm?

Housing booms never last but, again, some unexpected events had major impacts on the Australian housing market.

Ever-increasing house building costs

Many people who had signed contracts for a new home have been left out of pocket when building companies have been forced to close or increase the prices for homes being built.

A Labour shortage
In the house-building industry, things were not looking good. The impact of locked-down borders had started to be felt with no skilled workers coming into Australia and TAFEs and other colleges closed during lockdowns meaning there were no newcomers to the workforce.

A shortage in certain areas such as bricklayers or carpenters/joiners caused prices for these highly desired skills to increase while new house builds were delayed due to the lack of qualified resources.

Supply issues
The effects of the worldwide lockdowns, causing manufacturing industries to cease production, sometimes for months, have been exacerbated by the war in Ukraine.

The recent conflict between Russia and Ukraine may have an impact on global supply chains for some materials, such as oil and gas supplies; lubricants (such as motor oils); plastic packaging materials like cups or bottles used for food service applications.

The sanctions imposed against Russia are also likely to affect the country’s economic stability in future which could lead to lower production levels or higher prices of raw goods like aluminium ore needed by various industries.

Another by-product of the Ukraine war has been the soaring cost of fuel, causing transport costs to rise, worldwide.

Construction companies, faced with unexpected cost increases, have been forced to increase the price of new homes.

Inflation and interest rates
The Reserve Bank of Australia (RBA) has been fighting inflation by increasing the base lending interest rate this year. Analysts believe it may be raised as high as 3% before the end of the year.

Problems for those building new homes?

The government’s ‘Homebuyer Grant’ and record low-interest rates encouraged many people to sign contracts in 2020/2021.

But now they’re facing financial problems of their own because of the increasing interest rates for home loans, and the increased price of their construction, which may cause financial difficulties for those who borrowed a lot of money at an affordable rate.

Conclusion – a good time for buyers!

Rising house prices and the sellers’ market are over for now. House prices are falling across Australia. Now would be a good time to purchase an investment property. Mortgage interest rates are higher at the moment but, in the long term, property in Sydney will increase in value.

The pressure is no longer there, with the FOMO atmosphere we saw at house sales in 2021. Indeed, some house sellers may decide not to put their property on the market yet but there are bargains to be found across Sydney.

What to consider when purchasing a property in Sydney

When purchasing a property in Sydney, there are a few things you’ll want to take into consideration. Here are four things to keep in mind:

  1. Location – When looking for a property in Sydney, you’ll want to make sure to consider the location. The Sydney suburbs are constantly changing, you’ll want to make sure the suburb you choose is near to schools, beaches or sports centres, depending on your needs.
  2. Property Type – Sydney offers a wide variety of property types, you’ll want to make sure you choose the property to suits your requirements. From apartments to houses and everything in between, Sydney has something for everyone.
  3. Size – Another important thing to consider when purchasing a property in Sydney is the size of the property. List your requirements, the number of rooms you need, etc.
  4. Budget – Finally, be sure to consider your budget when purchasing a property in Sydney. The Sydney market can be quite expensive, make sure you’re prepared for the high costs associated with buying in this city. Meet with a mortgage broker or bank before you start your property search.

Sydney suburbs – the expert’s viewpoint

Finally, we will look at some suburbs where you should be looking to buy your next home or investment. We have taken some viewpoints from the latest edition of MGM MARTIN’s online magazine “Your Neighbourhood”:

In summary

An article by our Director, Michael Xylas, confirms the price of property in Australia has been on a steady rise for the last few years.

In 2021, it reached its strongest growth rate at 23%, he adds, before pointing out this trend is now changing as more new homes are coming onto the market and interest rates continue to increase leading up to a reduction in some property prices.

With the FOMO frenzy no longer impacting house sales, Michael confirms house buyers today are able to concentrate on the property and not on the competition from other buyers.

Michael warns us, although this is a great time to be seeking property, purchasers must offer a realistic price to avoid missing out. Another potential problem for buyers is some properties won’t appear on the market while it cools, patience is ke

Best suburbs for bargain hunters

Elsewhere in the same edition of the magazine, in reference to data from realestate.com.au, great Sydney suburbs for bargain holders include

  • Caringbah South
    • With a decline in potential buyers and growth in new property listings
  • Paddington
  • Sutherland Shire
  • Newtown
  • Bondi Junction
    • Suburbs identified as “attention-worthy”
  • Zetland
  • Rosebery
  • Randwick
    • Located in MGM MARTIN’s core area these suburbs are showing a decline in buyers and an increase in listings.

The article concludes:

“Is now a good time to buy? No, it’s not just good – it’s perfect! The market is finally on the buyer’s side and considering the latest rental trends, investors will keep benefitting after becoming landlords too.
Don’t miss this opportunity!”

At MGM MARTIN, we should be the first point-of-call for property seekers in Sydney. Our experience and unrivalled local knowledge guarantee you top-quality, expert advice.

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