Sydney Property Market 2021 [October UPDATED]

Sydney is one of the most beautiful cities in the world, which is precisely why its property values keep climbing. In this article, you’ll find all of the latest Sydney property market news.

Table Of Content

1. Sydney Property Market News [October 2021]
2. Sydney Property Market Growth & History
3. Sydney Property Market Forecast 2021
4. How Will The Latest Lockdowns Affect the Sydney Property Market?
5. Most Expensive Suburbs in Sydney
6. Top 10 Most Expensive Suburbs In The Sydney Property Market
7. Cheapest Suburbs in Sydney’s Property Market
8. Sydney LGA Regions With The Lowest/Highest Median Profits
9. Sydney Growth Suburbs
10. Sydney Suburbs With The Lowest Price Growth:
11. Sydney Apartment Market
12. Sydney’s Rental Market
13. Vacancy Rates in Sydney
    
14. Sydney Rental Yields
15. Sydney Rent Prices
16. Property Investment Advice For Sydney

Over the past year, Australia’s property market values have increased at rates not seen in over a decade, and Sydney has led the charge.

Home to stunning beaches and Australian landmarks like the Opera House and the Harbour Bridge, and serving as the birthplace of icons like Hugh Jackman and Miranda Kerr and bands like AC/DC and INXS, Sydney is a cultural hub of Australia and is considered one of the most beautiful places in the world.

As such, it should come as no surprise that Sydney has a highly sought after property market, and the 3rd most expensive property market in the world. Sydney regularly ranks highly in terms of liveability, and over the past 50 years, Sydney’s property values have risen 520% after accounting for inflation. 

That’s why we’ve decided to take a deep dive into the Sydney property market, to discuss its history, the current trends, the latest lockdowns and much more. 

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Sydney Property Market News [October 2021]

Sydney finally exited it’s lengthy 107-day lockdowns on the 11th of October, which is expected to lead to an uptick in the Sydney property market, in both transaction activity and property values as restrictions ease. This has been the trend following prior lockdowns in both Victoria and New South Wales.  

Over the past year, Sydney dwelling values have grown by 23.6%, outpacing the national average of 20.3%. However, this rate of growth is beginning to slow, as dwelling values rose by 1.9% in September – down from a 3.7% monthly increase in March.

Sydney’s Dwelling Values as of October 2021. Source: CoreLogic’s Hedonic Home Index

While The median national house price now sits at $674,848, Sydney’s median house price towers above that at $1.3m.

CoreLogic’s research director Tim Lawless has stated that in order to raise a 20 per cent deposit, an average Sydney home buyer would need roughly $262,300.

As of the 11th of October, Sydney’s auction clearance rate was 83.2%, hovering right around the national weighted average of 83.3%.

The number of houses you could purchase for the price of a Sydney house today.

Source: Savings

Sydney Property Market Growth & History

Sydney houses are the most expensive in Australia and have been for many decades. Not only that, but property values in Sydney have been increasing at a much greater rate than wages have.

For example, the cost of an average house in Sydney today would have bought 2.5 houses in 2000, and 5.2 houses in 1970. In 1970, the average house in Sydney was worth 4.5 times the average income. Last year, the average house in Sydney was worth 12.2 times the average income.

Source: Sydney Morning Herald

The primary reason for rising dwelling values in Australia and Sydney in particular ultimately boils down to the supply and demand for properties. As Sydney’s population continues to rise – primarily through immigration – naturally the demand for properties will too. 

This is coupled with the fact that this population growth has suppressed wage growth, which has caused house prices to rise faster than wages, making properties more expensive relative to the average salary. 

In addition to this, the Organisation for Economic Co-operation and Development (OECD) has identified that “overly onerous planning restrictions [in NSW] have restricted the supply of new housing and raised prices.”

The resultant effect has meant that the growth in population is outpacing the development of properties in New South Wales, which is contributing to the rapid rise in property values throughout Sydney. 

Lastly, the historic-low interest rates set by the RBA have made it more enticing now than ever to purchase property in Australia, as mortgage repayments will remain at record low rates until 2024. 

This is why, over the past fifty years, the Sydney property market has risen 520% in value after accounting for inflation. 

Sydney Property Market Forecast 2021

During the COVID-19 pandemic, the upward trajectory of Australia’s dwelling values was reversed, as uncertainty shrouded the property market and economy as a whole. 

Throughout this period in 2020, Australia’s housing market values declined by 2.1% –  though this decline was very short-lived. 

A combination of effective fiscal policies and increased savings due to the inability to travel, combined to drive up the Australian property market by 12.2% through the first six months of 2021.

According to KPMG, capital cities enjoyed the biggest increases in property values and Sydney led the charge, with dwelling values climbing an average of $125,000 over the year.

In fact, Sydney’s property market has been performing so well in 2021 that it has helped to cut NSW’s budget deficit projection in half, thanks to the $9.379 billion generated by stamp duty over the 2020-21 financial year, making it the number one source of tax revenue in NSW. 

Ultimately, despite being in over 100 days of consecutive lockdowns in 2021, Sydney’s property market has continued to thrive and hit new records for dwelling values in the region. 

In fact, the property market was so hot over 2021 that the debt-to-income ratio among Australians climbed to more than one in five home buyers that are now borrowing more than six times their income, up from 16 per cent a year earlier.

This prompted APRA to intervene by tightening serviceability buffers, albeit in a minor fashion. 

CoreLogic’s head of research Eliza Owen has said that “Affordability is an increasing challenge for many segments of the market, but particularly first home buyers who have not had the benefit of home ownership as a source of wealth through equity generation. The announcement this week by APRA of further tightening of serviceability buffers is a subtle approach to financial stability and far less likely to move the housing market into negative territory.”

How Will The End Of Lockdowns Will Affect the Sydney Property Market? 

Sydney has emerged from 107 days of lockdown, which will likely see an immediate uptick in previously inaccessible industries like pubs, hairdressers, and restaurants and cafes. 

However, while many business owners will be letting out a sigh of relief now that they can finally open their doors, it also means that they will no longer be getting access to COVID-19 support payments. 

As such, the reopening of Sydney may also mean that many businesses on life support could struggle to survive on their own. The economic hardship isn’t over yet. 

As Sydney’s property market is concerned, private inspections were still allowed, however, in-person auctions were banned during the lockdowns.

The reopening of the economy may see an initial uptick in auction activity, both in the number of homes listed as well as the clearance rate of auctions across the region. 

Though affordability remains a pressing issue across the Sydney property market, and if there is economic strain among Sydneysiders due to underemployment or struggling businesses, this may add headwinds to the continued growth of Sydney’s property market.

Most Expensive Suburbs in Sydney

With rapidly rising property values, and the most expensive suburbs in Australia, it should come as no surprise that Sydney has a growing list of suburbs that have property values above $1 million. 

In fact, over half of the houses sold in Sydney this year went for over $1 million, a likely result of the four-fold increase in million-dollar-plus homes in Sydney since 2011. 

There are 340 house markets and 79 unit markets in Sydney with a current median value above $1 million as of May 2021, reflecting a 25.4% increase over the number of million-dollar suburbs in 2020 alone.

Source: Domain

A great deal of this growth was brought on by the COVID-19 related property market spike, and in the last 12 months alone, over 200 suburbs across Australia joined the “million dollar club.” A quarter of these suburbs were based in Sydney.  

Not only does Sydney have a growing list of suburbs that have median property values of $1 million or more, but there is also a hefty list of suburbs in Sydney where you can’t find a house valued under $1 million. 

According to the Sydney Morning Herald: 

“In Sydney, there were 32 suburbs in the upper north shore, 30 in the city and east, 24 in the northern beaches, 23 in the lower north shore and 22 in the inner west where every home sold for more than seven figures.”

Source: CoreLogic

Top 10 Most Expensive Suburbs In The Sydney Property Market

Sydney is home to some of the most luxurious homes and suburbs in the world, and below is a list of the top ten most expensive suburbs in Sydney based on their median sale price for houses and units.

Sydney Suburbs with the highest median house sale price:

1.  Darling Point – $7.06m
2.  Bellevue Hill – $5.72m
3.  Vaucluse – $5.39m
4.  Double Bay – $4.76m
5.  Centennial Park – $4.32m
6.  Woolwich – $4.2m
7.  Mosman – $4.1m
8.  Tamarama – $4m
9.  Rose Bay – $3.9m
10.  Dover Heights – $3.7m

While Darling Point had the highest median value of houses sold in a Sydney suburb, Mosman achieved an impressive 220 sales at $4.1 million, more than double the number of houses sold in any of the other top 10 suburbs. 

Sydney suburbs with the highest median unit sale price:

1. Point Piper – $2.2m
2. Darling Point – $1.78m
3. Millers Point $1.69m
4. Milsons Point – $1.65m
5. Kirribilli – $1.51m
6. Cabarita – $1.49m
7. Putney – $1.45m
8. The Rocks – $1.39m
9. Cremorne Point – $1.39m
10.  Balmain East – $1.33m

The above lists were sourced from CoreLogic.

Cheapest Suburbs in Sydney’s Property Market

With affordability becoming a growing concern throughout Sydney, it can also be useful to look at which suburbs are the least expensive, as for many, properties in this category will be a more realistic investment prospect. 

However, it can also be important to strike a balance between affordability and proximity to Sydney’s CBD – because if you’re going to pay Sydney prices, you’ll want to be near the beauty of the city. 

As such, here are some of the cheapest suburbs to buy a house in Sydney that are within 10km of the CBD.

Sydney suburbs with lowest median house price within 10km of CBD.

1. Earlwood – $1.4m – 10km to CBD 
2. Arncliffe – $1.2m – 10km to CBD
3. Croydon Park – $1.2m – 10km to CBD
4. Tempe – $1.2m – 8km to CBD 
5. Newtown – $1.4m  – 4km to CBD

 List sourced from Domain

Sydney LGA Regions With The Lowest/Highest Median Profits:

If you’re a property investor, the one thing you’ll be focused on is profit – particularly if you’re planning to flip property over the short term and want to know the best regions to do it in. With this in mind, here are the Sydney LGAs with the highest and lowest median profits as of June 2021.  

Source: Core Logic Pain and Gain Report – June 2021

Sydney Growth Suburbs

When it comes to understanding the trajectory of any given suburb, price growth of that area is a useful indicator. When price growth is high, this indicates a high demand for properties in that region and a positive sentiment toward the continued growth of either the property values or the infrastructure of that area.

Sydney Suburbs With The Lowest Price Growth:

An area with low price growth likely indicates a decreased demand in that suburb or an increase in the supply of properties within the region. Additionally, a price ceiling may have been reached which is on par with the available infrastructure and amenities in that suburb, meaning that prices may not significantly rise until sufficient infrastructural improvements are made. 

Sydney Apartment Market

Across all capital cities, a gap is growing between house prices and apartment prices. While capital city house values climbed 14.2% across the 16 months to June in 2021, unit values climbed just 5.6% in capital city unit values over the same period. As per CoreLogic: 

“As of June 2021, the median capital city house value was $797,287, compared to a median unit value of $611,117. This marks a 30.5% gap between median house and unit prices, which is the highest on record.” 

In Sydney, the price gap between units and houses is more glaring than in any other capital, sitting at a record-high 54.2% difference between house values and unit values.

Source: CoreLogic

That being said, the Sydney apartment market is at record highs across several markets, with areas like Sydney’s northern beaches jumping $141,000 to almost $1.16 million over the June quarter.

Moreover, some are speculating that the Sydney apartment market forecast may be about to change. Domain’s chief of research and economics, Nicola Powell has said that “Affordability will constrain buyers. It already is in Sydney, and what we see now is [price growth] flowing onto units. I expect to see an acceleration of unit growth and a slower pace of house price growth. House prices will still rise, but it won’t be as steep.”

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Sydney’s Rental Market 

While house prices continue to climb in Sydney, rental rates for units have taken a dive during COVID-19 as landlords compete for tenants amid rising vacancy rates. 

Both Sydney and Melbourne landlords will struggle this year, with unit rents sitting -1.1% and -6.4% lower year-on-year respectively. Sydney and Melbourne were the only two capital cities to have seen rental rates for units decline this year, presumably because of the cessation of international migration into the cities due to COVID-19. 

Contrastingly, Perth’s Year-on-Year change in unit rental yields was the highest of any capital city at 14.7%.

Rental rates for houses in Sydney rose 5.9% over a 12-month period, which was the second-lowest increase to Melbourne, where house rental rates rose by 2.3% for the 12-month period. 

The median monthly rent price for a house in Sydney is $646, and for units the median monthly rental rate is  $518.

Source: CoreLogic’s Quarterly Rental Review

Vacancy Rates in Sydney

Australia’s national residential vacancy rate fell to 1.7% in June, down from 1.8% in May according to SQM Research, reaching the lowest level seen since May 2011.

Across the country, there are 60,457 empty rental properties, which is down from 62,144 in May. 

Melbourne has the highest rental vacancy rates of any capital city at 3.5%, though this is down from 3.7% in May. Sydney has the second-highest rental vacancy rates of any capital city at 2.8%, down from 2.9% in May. 

This has likely been spurred on by the exodus of workers away from capital cities, primarily in Victoria and 

The Sydney area with the highest number of empty homes was Parramatta at 3.3% vacancy rate, followed by Ryde at 3% and the inner south-west at 2.9%.

Contrastingly, the Sydney areas with the lowest vacancy rates were Camden at 0.3%, the Blue Mountains and Wyong at 0.4% and Gosford at 0.6%.

Sydney Rental Yields 

Landlords in Sydney can expect the lowest rental yields of any capital city, with the following gross rental yields provided by CoreLogic: 

• Sydney – 2.56% 
• Melbourne – 2.83% 
• Brisbane – 4.11%
• Hobart – 4.19%
• Adelaide – 4.23%
• Canberra – 4.20%
• Perth – 4.33% 
• Darwin – 6.08% 

Sydney property investors will want to look at properties on the Central Coast for the highest rental yields, as 7 out of the top 10 suburbs with the highest rental yields are in the Central Coast, with Wyong taking first place at a 5% gross rental yield.

Source: CoreLogic’s Quarterly Rental Review 

Sydney Rent Prices

According to Domain, Sydney’s median house rents as of July are at record highs of $550 per week, making it the third most expensive city to rent in, behind only Darwin and Canberra. Sydney’s Eastern Suburbs was the most expensive suburb to rent a house, at $1,100 per week, followed closely by the Northern Beaches at $1,050.

Contrastingly, Sydney’s median unit rent price is $470, which sits at 2013 levels after declining for several years, however, there are regions that are seeing record-high unit rent prices. 

The Northern Beaches took the top spot for rental prices in Sydney at $630 per week, followed by the Eastern Suburbs at $590 per week. 

According to Domain: 

“Rents for houses and units hit record highs in the Northern Beaches, Central Coast, and the outer west and Blue Mountains, while house rents are at their peak in Sutherland, the outer south-west and Baulkham Hills and Hawkesbury region.”

Other regions have experienced a climb in median unit rents over the quarter despite dropping year-on-year, including the city, inner south, eastern suburbs, North Sydney and Hornsby.

Property Investment Advice For Sydney

Investing in Sydney is no different from investing elsewhere in Australia, albeit with more expensive properties. As such, many seek out off market property opportunities in Sydney in the hopes that they can find a property below market value. 

However, regardless of where you invest, you’ll want to look at the underlying fundamentals of the market and assess what is best for your situation. 

For starters, ensuring that you have a solid understanding of the latest Sydney property market news will help you to navigate the ever-changing property landscape. 

For example, do you intend to purchase an investment property in Sydney with the intention of flipping it? Or do you wish to lease out your property in order to generate an income stream and tax benefits? 

If you intend to lease out a property, particularly in Sydney, then you’ll want to bear in mind that rental yields for units are relatively low in Sydney, and are more subject to the fluctuations associated with COVID-19. 

This is because the COVID-19 pandemic has cut the supply of international migrants and thus the supply of renters in the market. This will likely change when international travel resumes, but it’s unclear when that will occur. 

Moreover, the NSW’s unit market is about to be flooded with new developments which will add further strain on the existing oversupply. 

These are all things you’ll want to consider if you are thinking about getting an investment property in Sydney as all of these factors can make or break your profit margins. 

You can read our full article on how to find great property deals in this booming Sydney market to learn about the rest of the indicators that will guide you toward high-growth suburbs. Though if you’d like to find off-market property in Sydney, you may wish to attend one of our Real Estate Rescue courses. 

However, with the RBA maintaining that interest rates will be kept at record lows until 2024, and NAB predicting continued growth in Sydney in 2022, it looks like all lights are green for property investors in the Emerald City and for the NSW property market more broadly.

Can you still buy properties at a discount? 

Australian house prices haven’t been this hot for decades. And, as we’ve just mentioned, they’re going to continue heating up.

“Great! So how am I supposed to find a deal in today’s market?”, I hear you say.

Well, let us show you what some of our graduates have achieved.

Some have found properties at 10% below market value, while others have bought properties at 40% below market value.

And you can too.

Learn how our students are finding these amazing property deals (even in a bull market!) at our upcoming Real Estate Rescue Masterclass.

Frequently Asked Questions

Is now a good time to buy property in Sydney?

The Sydney property market is at record heights and is likely to continue to climb in value, albeit at a slower rate toward the latter half of 2022, when property values become too unaffordable.

When will Sydney property prices rise?

Sydney property prices have been rising consistently for decades and will continue to do so at varying rates. Currently, Sydney property prices have climbed at their fastest rate in over a decade.

Are property prices going down in Sydney?

It’s unlikely that prices will go down in Sydney, given that they have continued to rise throughout the pandemic. However, as affordability becomes a growing concern, price growth will begin to slow down.

Is the Sydney property market going to crash?

Without a crystal ball, it’s impossible to determine if a market crash is around the corner, or on the horizon at all. With that said, the big banks and many experts are predicting that Sydney’s property market will continue to grow.