Outer West leads Sydney price surge as north shore lags behind

Auctioneer Michael Garofolo said demand was strongest for properties priced under $2m. Picture: Tim Hunter.

Sydney’s most affordable regions have outperformed the rest of the city over the past year, with new figures revealing double-digit annual growth in prices across the strongest markets.

The PropTrack research showed the Outer West and Blue Mountains region – including Penrith, St Marys and surrounding suburbs – led the city with 11.27 per cent annual price growth.

The South West, encompassing Liverpool and Fairfield, followed closely with a 10.87 per cent annual rise in dwelling prices.

These double-digit rises were twice as high as the increases in prices across some traditionally higher-demand areas such as the north shore and Hills District.

They were also higher than the circa 7 per cent rise in Greater Sydney dwelling values.

Economists and local agents said demand was deepest at the more affordable end of the market due to increased activity from first-home buyers, upgrading families and investors.

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REA Group economist Eleanor Creagh said first homebuyer incentives were helping increase demand. Picture: John Gass

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Other high-growth pockets were the Outer South West, which includes Campbelltown and Camden, where prices rose by an average of 9.72 per cent.

Prices in the Inner South West, covering much of the Canterbury-Bankstown region, lifted 9.56 per cent.

Blacktown (8.09 per cent) and Sutherland (8.60 per cent) also outperformed the citywide trend.

By contrast, higher-priced areas such as the north shore (3.41 per cent) and Ryde (4.43 per cent) recorded only modest upticks.

Dwelling values in the eastern suburbs and northern beaches recorded yearly growth close to the citywide average of 7.37 per cent and 6.14 per cent respectively.

This divergence in price growth between cheaper and pricier areas reflected what market analysts described as a “two-speed Sydney” divided largely by price point.

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The median price of a Sydney house is now $1.62m.

Agents across multiple regions reported consistently high inquiry levels for properties listed up to about $2m, with open homes in some suburbs drawing crowds reminiscent of the pandemic-era boom. Above that threshold, buyer interest often tapered off.

Auctioneer Michael Garofolo, director of auction house Cooley, said bidding at auctions was particularly fierce for properties under the $1.5m cap for the government’s First Home Guarantee Scheme.

“Once you move beyond that, the pool of buyers becomes thinner,” he said.

REA Group economist Eleanor Creagh said home prices were rising in Sydney due to a combination of interest rate cuts, expanded first-home buyer incentives and a noticeable return of investor spending.

Increased demand from these buyer groups coincided with a lacklustre spring selling season: the volume of homes for sale lifted but not by enough to match the rise in demand, Ms Creagh said.

Auctioneer Andrew Cooley said family homes, properties with large backyards and extra bedrooms, were in short supply. Picture: Sam Ruttyn

Auctioneer Andrew Cooley, director of Avenue Auctions, said “family homes”, the larger properties on generous blocks, were rarely coming up for sale because the owners had little incentive to sell.

“It’s a very strong market, but it’s not a boom market,” he said, noting this meant few homeowners willing to take an opportunistic punt on the market.

“It is not at the stage where you’d have people trying to see what they could get … they’re staying put.”

Citywide, a typical Sydney house now costs about $1.62m, up from just over $1.5m at this time last year, while the median unit price is $883,000, a rise from $830,500 a year ago.

Sydney houses were an average of nearly $500,000 pricier than in Brisbane, the second most expensive capital, and about $600,000 higher than in similarly sized Melbourne.

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