Sydney property market forecast for 2024

Want to know the outlook for the Sydney property market in 2024? Terry Ryder shares his thoughts on how things are looking.

Sydney is now the strongest market in the nation, having overtaken Perth as the jurisdiction with the highest percentage of locations with positive rankings in Hotspotting’s Spring survey of sales activity. Rising markets dominate and few declining ones remain.

Sydney is also a national leader in price growth in 2023, both for houses and apartments.

Sydney had shown signs of recovery in Hotspotting’s Winter 2023 survey, but the Spring analysis showed that the city’s market has gone to a considerably higher level more recently.

The Spring survey found that 82% of suburbs across Greater Sydney had positive classifications, with rising suburbs the largest cohort, compared to 46% in the Winter survey three months earlier.

This placed Sydney at the forefront of a national revival in sales activity, which has gathered momentum in 2023 despite higher interest rates and other economic disruption.

The upsurge in the Greater Sydney market is widely spread across the metropolitan area, stretching from the booming Sydney City market through top-end municipalities such as Woollahra and Waverley, through the Inner West, Canterbury-Bankstown and Sutherland Shire, to western precincts such as Blacktown, Parramatta, Liverpool and Penrith.

As 2023 has evolved, the Sydney revival has progressed from promising to dynamic. Based on the number of suburbs classified as rising markets, this is the strongest Sydney market since the ‘COVID boom’ in 2021.

It reverses five quarters of decline and provides a strong basis for the steady price growth of 2023 to continue to the end of the year and beyond.

The key factor is the imbalance between supply and demand. There are shortages of everything important, including properties listed for sale, new dwellings and homes available for rent.

Although listings of homes for sale have increased with the onset of spring, SQM Research data published in September indicated that listings remained 6.5% lower than a year earlier. This has helped generate price growth, with the CoreLogic Home Value Index published on 1 November reporting a 12.1% rise in house prices in the year to date (the highest in the nation) and an 8.0% increase in unit prices (third highest among the capital cities, after Brisbane and Perth).

What property markets in Sydney are the strongest?

A standout feature of the Greater Sydney market is the rise of apartment markets in the inner-city areas and beyond.

The Sydney City municipality is arguably the strongest market in the Greater Sydney metropolitan area: all but one of the 22 suburbs in the Hotspotting analysis have positive rankings. The strongest suburbs include Elizabeth Bay, Forest Lodge, Potts Point, Waterloo and Zetland.

The theme of strong apartment markets can be seen in other markets throughout Greater Sydney, from upmarket suburbs through to downmarket areas.

Locations dominated by apartments which are rising markets based on sales activity trends include Mascot, Rockdale, Burwood, Breakfast Point, Rhodes, Warwick Farm, Kirribilli, North Sydney, Harris Park, Parramatta, Rosehill, Westmead, Wolli Creek, Macquarie Park, Meadowbank, Homebush, Homebush West, Elizabeth Bay, Forest Lodge, Haymarket, Potts Point, Pyrmont, Rosebery, Rushcutters Bay, Sydney CBD, Ultimo, Waterloo, Woolloomooloo, Zetland, Darling Point, Double Bay and St Leonards.

There is notable strength in the top-end precincts of Greater Sydney, with the LGAs of Woollahra, Mosman, Randwick, North Sydney, Willoughby and Waverley all recording overwhelmingly positive rankings. Leading suburbs include Bondi Beach in the Waverley LGA and Kensington in the Randwick LGA.

The Northern Beaches LGA is showing signs of returning to its previous status as a market leader: 18 of the 24 suburbs have positive classifications.

Middle-market precincts doing well include the Canterbury-Bankstown LGA, where 19 of the 22 suburbs have positive rankings, including nine rising suburbs such as Belmore.

In the City of Parramatta, 15 of the 21 suburbs have positive trends including Guildford.

Other standouts are the LGAs of Sutherland, Cumberland, Fairfield, Hornsby, Rockdale and Ryde.

Outer-ring precincts have recovered emphatically, led by the City of Blacktown where 21 of 24 suburbs in our analysis have positive rankings, including 10 rising suburbs and eight recovering ones. Rising markets are headed by Mount Druitt and Riverstone.

The City of Penrith is an example of the recovery theme: there are seven recovering suburbs, as well as four rising ones, among the 14 Penrith suburbs in the report. Rising markets include Colyton and Jordan Springs.

The City of Liverpool also has joined the revival: 14 of the 17 suburbs in our analysis have positive rankings, including five recovering suburbs and six rising ones. The rising suburbs are led by Austral, Chipping Norton and Hinchinbrook.

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