Sydney’s booming property market has pushed house prices in dozens of suburbs up by more than $500,000 in the space of a year, new figures show.
Greater Sydney’s median house price hit just shy of $1.5 million last quarter, with beachside suburbs and lifestyle locations leading the charge for price growth, the latest Domain figures have revealed.
Bronte, in Sydney’s eastern suburbs, saw the biggest jump by far, with the median house price climbing a whopping $1.9 million, or 55 per cent, over the year to September to reach $5.35 million. That’s an increase of about $5200 per day.
Nearby South Coogee, Manly and Palm Beach on the northern beaches, and Killara on the upper north shore, also saw median house prices climb by more than $1 million.
“Bronte has been red-hot,” said selling agent Alexander Phillips of PPD Real Estate. “Never in 20 years here [have I seen such growth] and I don’t think we’ll ever see it again either.
“There have been more sales above $10 million than in any other year … and that’s driving [the median] up.”
While there had been some sales to expats, most of the buyers were locals looking to upgrade and move closer to the coast as remote working removed the need to travel to the city every day, Mr Phillips said.
House prices across more than a third of the Sydney suburbs which recorded a median – based on a minimum of 50 sales – were up by at least 20 per cent year-on-year, with 45 suburbs seeing prices jump by more than $500,000.
Bilgola Plateau and North Narrabeen had the largest percentage rise after Bronte, with house prices climbing more than 40 per cent. Their fellow northern beaches suburbs of Mona Vale and Fairlight, along with West Pymble and Gordon on the north shore, and Belmore in Canterbury Bankstown, were also among some of the top suburbs for growth – with the median house price in each climbing more than 35 per cent.
Remote working had driven up demand for the northern beaches, with record-low interest rates and greater demand for larger homes during the pandemic further fueling price rises, said Michelle May, principal of Michelle May Buyers Agents.
“A lot of people wanted to live on the northern beaches but the commute into the office held people back … all of sudden it becomes an option,” she said.
House prices would likely stabilise as more properties came onto the market, she said, but she expected unit prices could strengthen further as more people were priced out of the housing market.
“I hope this growth levels out because it makes it near impossible [to buy],” she said.
In Belmore, where house prices climbed about 39 per cent to a median of $1,384,000, there had been strong demand from house hunters looking to upsize, particularly those priced out of the inner west and other pockets of Canterbury Bankstown, said Michael Sabongi, a sales manager at Professionals Belmore.
“The house market has gone ballistic,” he added, noting good buyer demand and limited supply in lockdown had resulted in the strongest market he had ever seen in the suburb.
The desire to upsize had driven much of the increased buyer demand, supported by strong capital gains, increased household savings and low rates, said EY Oceania chief economist Jo Masters. She said she was not surprised to see some of the biggest price jumps were in affluent suburbs, noting those in white-collar jobs were less affected by the pandemic and had a relatively higher savings rate, driving up household balance sheets.
Property prices likely had a little more growth to go, Ms Masters said, thanks to those increased savings and low rates, but also a strong labour market, potential wage growth ahead and an expected pickup in population growth when borders reopened.
However, the pace of growth had slowed and was likely to pull back further as buyers responded to the rollout of macro-prudential controls and rising fixed interest rates, she added.