With Sydney house prices rising more than 20 per cent in the past year and with the median house price climbing past $1 million, the next barrier for many suburbs will be the $2 million median house price mark.
Leading buyers agent, Nick Viner, founder of Buyer’s Domain, believes there are a number of suburbs across Greater Sydney that will be next in line to reach that “psychological” price point.
Mr Viner said that it’s normally the top end of the market that leads prices higher across a city and the suburbs he’s identified will likely be the first movers.
“These suburbs have the right fundamentals for house prices to reach the next level,” he said.
“The $2 million mark is a real psychological barrier for many buyers, but once it’s breached the market becomes more comfortable with the new price level.
“Those who buy in the lower price brackets can expect their property values to be quickly dragged up as the market settles into its post-$2 million benchmark.
“After all, a rising tide floats all boats. In property, gains are led from the top end.”
Mr Viner said that it’s still important to invest wisely, even when markets are strong.
“In hot markets, like the current one, you also want to be ahead of the competition,” he said.
“There are essential elements you should look for in every home or investment, but suburbs also have their own localised ‘quirks’, which make one property a better opportunity than another in the same suburb.
“Good local knowledge, thorough due diligence and the right advice are all essential.”
Mr Viner has identified the top five suburbs he believes will soon hit the $2 million median house price mark.
Leichhardt (current median house price of $1.76 million)
The inner-city suburb of Leichhardt is Mr Viner’s top pick.
“Leichhardt is the very definition of a ‘bridesmaid’ suburb,” he said.
“Its neighbouring suburbs comprise $2 million-plus locations such as Annandale, Lilyfield and Haberfield.
“These areas are heritage conservation zones offering extraordinary lifestyle facilities and convenience services. Leichardt buyers can access all the same amenities at a far lower buy-in price… for now at least.”
Mr Viner said Leichhardt’s position just five kilometres from the CBD and it’s transport options made it a good choice.
“If you can find anything with three bedrooms under $2 million here, that would be a great buy,” he said.
“For below-median buyers looking to profit in the $1.6 million to $1.8 million range, a two bedder with potential to add a bedroom or expand the floor area in the future would be ideal.”
Alexandria (current median house price of $1.875 million)
Mr Viner said he was surprised Alexandria hadn’t already cracked the $2 million median house price.
“The suburb is on the fringe of the affluent and highly desirable inner-east,” he said.
“You have ready access to Sydney’s best lifestyle suburbs, cafes and restaurants, and retail outlets. It’s also a hop, step, and jump from the CBD.”
Mr Viner said Alexandria had an array of housing quality on offer.
“The key to making the most gains here is buying in one of the suburb’s best streets.
“That’s either in the ‘golden triangle’, as it’s known or on Lawrence St or Belmont St.
“You might have to pay a bit more for these locations.
“At $1.6 to $1.8 million you could find a two-bedroom terrace that would do well in the future.”
Rosebery (current median house price of $1.845 million)
Rosebery is close to some of the most high profile suburbs in Sydney and Mr Viner said it could benefit from that.
“Like Alexandria, this suburb is on the edge of the inner-east suburbs, so it is extraordinarily well placed to enjoy strong capital growth in the coming months and years,” he said.
“In addition, Rosebery is gentrification central. Its transformation into one of the city’s trendiest centres is well underway, and this bodes well for value growth.”
Mr Viner said Rosebery was a great option for families who can’t afford Kensington.
“It has larger family-sized homes priced around $2.5 to $3 million,” he said.
“In Kensington, the same property is closer to $3.5 million to $4 million.
“The challenge for the budget-conscious buyer here is finding stock – it’s an incredibly tight market with many houses well over $2 million already.
“That said, there have been two-bedroom semi-detached homes sold for the sub-$2 million mark and these could deliver an excellent value-growth option.”
Summer Hill (current median house price of $1.9525 million)
Mr Viner said he was also surprised that Summer Hill had a median house price below $2 million and tipped it wouldn’t stay that way for much longer.
“I expect Summer Hill will break the $2 million barrier in matter of weeks, given much of
today’s data is based on historic sales evidence,” he said.
“Once the recorded median goes above $2 million, expect growth in lower-priced properties to gain momentum fast.
“In fact, any property you can buy below $2 million today would be well worth consideration.”
Mr Viner said the nature of the suburb made it an appealing location.
“Summer Hill has a wonderful village feel with a strong community vibe,” he said.
“It has great local shopping and other facilities, and the train can get you to the CBD in about 20 minutes.
“A small two-bedroom terrace that needed some renovation work might be on the cards at that price point.
“If you have the means, buying in the right streets would be best. Ideally being south of Smith St, north of Junction Rd, east of Prospect Rd and bounded by Lewisham and the light rail will yield the best results.”
Newtown (current median house price of $1.680 million)
Ever-popular Newtown is priced well under $2 million and Mr Viner said this is excellent value.
“Newtown is already an extraordinarily popular near-city centre,” he said.
“It has street-wise cache and a cool urban feel. A wander along King St reveals great cafes, restaurants, entertainment and hip retail outlets.”
Mr Viner said Newtown’s location on the CBD doorstep and close proximity to Sydney University also made it an attractive suburb.
“The Royal Prince Alfred is also a great source of tenant demand,” he said.
“Because this is a city-lifestyle suburb, it’s going to bounce back strongly in this post-COVID lockdown period as businesses flourish once more.
“You can still find a two-bedroom terrace at around the $1.5 million to $1.6 million mark that should do well. Ideally, you want to be buying north of Alice St in Newtown.”
