Sydney’s residential property prices continue their inexorable rise, with an increasing number of suburbs joining the already crowded $1M and $2M clubs. In fact, with $1.2M now being the median price tag for Sydney houses, it’s becoming unusual to find homes priced below $1M.
While Sydney residential property prices remain high in a national context, compelling reasons explain why the city’s property market is performing strongly.
The $1M club is growing fast
According to CoreLogic, 36 of the 556 Sydney suburbs analysed joined the $1M club during the year ending October 31, 2023. With these new entrants, 401 of the 556 analysed Sydney suburbs now have a median price above $1M, constituting 70% of Sydney’s suburbs. The suburbs entering the $1M club were often in unassuming areas that more investors have been discovering. For example, Bungarribee, Quakers Hill, and Kings Park all joined the $1M club, with each of their medians rising over 15% during the year to October 2023.
The $2M club is also popular
The $2M club is growing fast, with 30 Sydney suburbs joining its prestigious ranks in the year ending October 2023 (according to CoreLogic), bringing its total to 170 suburbs, or 30% of Sydney’s suburbs. Suburbs entering the $2M club often benefited from their middle or outer ring positions. For example, Hurlstone Park, Eastlakes, and Carlingford all joined the club, with their October 2023 median prices ranging from $2.03 million to $2.07 million.
What’s Going On?
One of the key themes at play in Sydney’s residential property market over the past year has been the impact of the rise in remote working, contributing to outperformance by several middle and outer ring suburbs. Beyond this, the entire Sydney residential property market has benefited from an undersupply of homes in a city experiencing high demand fuelled by population growth and a decline in the average number of people per household. Thus, undersupply has been the name of the game and is expected to remain so in the foreseeable future.
However, it’s not all good news. After the sharp rise in interest rates, affordability and restricted borrowing capacity are becoming challenges for more buyers. While they are unlikely to offset the positive market drivers in the short term, they are likely to limit the extent of Sydney residential property price growth in the year ahead.
Sydney’s $1M and $2M clubs remain in expansion mode
The trends that supported Sydney property in 2023 remain in place for the year ahead. While affordability and borrowing capacity issues create a brake across the market, the ongoing undersupply of property in the high-demand Sydney residential property market supports higher prices in the foreseeable future. As a result, the $1M and $2M clubs are likely to remain in expansion mode.
Check out Landen’s Sydney property opportunities if you’d like to position yourself ahead of the next upward move in the city’s property prices.