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Revealed: Sydney's property hotspots set to surge in 2021

·5-min read
Cronulla Beach. Sutherland Shire's property market has been earmarked for strong performance across 2021. (Source: Getty)
Cronulla Beach. Sutherland Shire's property market has been earmarked for strong performance across 2021. (Source: Getty)

Despite the pandemic, certain pockets of Sydney’s property market are expected to heat up – and none of them are anywhere near the CBD.

“Sydney markets are defying the pandemic recession,” said hotspotting.com.au managing director Terry Ryder in his latest report, noting that the capital city saw a lift in sales activity and house prices across last year.

Sydney’s strongest-performing property hotspots can be categorised into the upper end of the market, and the ‘outer-ring areas’ that attract first-home and budget buyers.

Cherrybrook and the Northern Beaches fall into the first category, while the affordable western Sydney hubs Blacktown and Badgerys Creek of the second category have seen high levels of sales activity.

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The Sutherland Shire is also an “up-and-coming market”, with several suburbs in this area labelled either a rising or consistent market.

On the other end of the spectrum, areas that have high apartment density, such as Sydney’s CBD as well as Parramatta, have seen sales activity drop amid high vacancy rates.

“Our analysis of price trends across the Sydney metro area tell a remarkable story of stubborn resistance to the forces of the pandemic,” Ryder stated.

“Most suburbs have delivered growth in their median house prices in the past 12 months – and most also have had growth in the most recent quarter, amid the pandemic period.”

Here’s a breakdown of the Sydney hotspots poised for property price growth:

Blacktown, western Sydney

  • Median house price: $705,000

  • Median unit price: $495,000

As one of the most popular markets for home-buyers and investors, this region performed strongly during Sydney’s downturn in 2018-19 and also proved to be resistant to the pandemic.

Blacktown is not only drawing first-home buyers with its affordable houses, but has good links to transport and enjoys a $3.6 billion investment package in infrastructure and $1.6 billion in hospital upgrades.

The area has also benefited from the HomeBuilder grant and its proximity to the Badgerys Creek airport.

“Between 2013 and 2018, the median prices for many suburbs of Blacktown City grew strongly, with some delivering double-digit annual growth rates. The post-boom correction has made houses more affordable though most suburbs still have long-term capital growth rates of 7-8% per year,” said Ryder.

Badgerys Creek, south-west Sydney

  • Median house price, Liverpool: $770,000

  • Median unit price, Liverpool: $450,000

The site of the soon-to-be-built $9 billion Western Sydney airport, dubbed ‘Aerotropolis’, has been hailed by several property experts as an area for property growth.

“Badgerys Creek ... is destined to become an economic powerhouse. Government plans for recovery from the impacts of COVID-19, which include fast-tracking major infrastructure development, will enhance the importance of this precinct,” said Ryder.

On top of the $9 billion airport, the area will also see more than a combined $15 billion investment in roads, freight terminals, health and education precincts, and transport links.

The area will become a major employment hub, which will subsequently drive housing demand nearby.

“Suburbs that are strategically located near the airport development are likely to benefit from the evolution of this precinct through rising property prices. Relative affordability has made the region popular with first-home buyers,” Ryder said.

Cherrybook, north-west Sydney

  • Median house price: $1.485 million

  • Median unit price: $1.005 million

At the higher end of the market sits Cherrybrook, which has been one of Sydney’s most consistent property markets recording some of the best long-term capital growth rates in the country.

“There have been consistent sales of high-value properties, indicating a return of confidence in the market as restrictions ease and pent-up demand is actioned,” said Ryder.

Contributing to the property market’s performance includes political events and schemes, such as the 2018 Federal Election, the prudential regulator’s looser finance restrictions, tax cuts and interest rate cuts, and the launch of the Sydney Metro Northwest rail link.

With a new train line, houses in this area are expected to rise in demand, which will mean “sustained growth in prices and rentals”.

Sutherland Shire

  • Median house price, Miranda: $1.235 million

  • Median unit price, Sutherland: $645,000

Known by locals simply as ‘The Shire’, the family-friendly area hugs waterways and beaches and is home to the Royal National Park.

The southern Sydney area will rise in popularity thanks to the lockdowns that have forced most office workers to work from home, with many looking to make the change permanent.

“The Shire lifestyle makes it an ideal location to benefit from this trend. Against this background, the suburbs of The Shire offer good value, an excellent capital growth record and solid potential for future uplift,” said Ryder.

The region also has low levels of unemployment and vacancies, while maintaining strong long-term capital growth and population growth; units being built in this area nearly tripled over the last three years.

Northern Beaches, north of Sydney

  • Median house price, Avalon Beach: $1.96 million

  • Median unit price, Avalon Beach: $840,000

Despite the recent lockdown, this precinct was actually leading the Sydney property market resurgence in early 2020 and has actually been one of the most pandemic-proof, Ryder said.

“This highly sought-after precinct of Sydney was one of the most resilient markets amid the general postboom downturn in 2018-19 with stronger sales activity here than elsewhere in Sydney and prices in the apartment markets have held up well.”

Northern Beaches suburbs have also been a beneficiary of the remote work revolution, and Frenchs Forest has been declared a development priority for the NSW Government, which has spurred house sales.

Projects completed or underway in the area include a $600 million hospital and $500 million on roads, which are generating jobs.

Ryder told Yahoo Finance he doesn’t expect the lockdown to affect the area’s long-term prospects.

“This was a short-term aberration and our recommendations take a long-term view,” he said.

He believes many pundits last year also overestimated the lockdown’s impact on property prices.

“Throughout all the upheaval caused by the pandemic, suburbs on the Northern Beaches showed strong price growth in 2020.”

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