Prices in Sydney’s property market surged over the pandemic era as cheap borrowing saw buyers flock to snap up properties at a time when supply was scarce.

It was the suburbs with a clear lack of available properties to buy where prices rose the most rapidly.

It’s a different story for Sydney’s property market in 2022, and while prices have cooled from their peak, there are some suburbs where demand is still driving strong competition, according to recent PropTrack data.

After all, some of the city’s suburbs are so tightly held that an available property for sale comes around once in a blue moon with homeowners holding onto their houses for as long as 20 years.

Areas in lifestyle or coastal suburbs are in particularly strong demand as homebuyers wait to secure their dream property.

PropTrack economist Angus Moore said many of the most in-demand suburbs are in more peripheral areas, which is consistent with what’s happening with home prices.

“We are seeing prices in peripheral parts of the city hold up a bit better than prices in the inner city, which suggests that the Covid trend towards people wanting a bit more space and being less tied to the inner city is continuing,” he said.

“There’s also an aspect of the relative affordability of some of these suburbs compared to the inner city.”

The sea- and tree-change shift we have seen accelerate during the height of the pandemic has caused an uptick in homebuyers looking for more space, a larger home, lifestyle property, or waterfront living.

And the pandemic-driven shift to remote work has allowed more Australians to chase that dream move.

“They offer more of the sort of lifestyle trend that we’ve seen through Covid of larger homes and living near amenities like beaches and national parks as opposed to living close to the inner city,” Moore said.

Analysis by PropTrack shows the Sydney suburbs where buyer demand remains significantly strong.

Sydney Suburb Russell Lee

The most in-demand Sydney suburbs 

Sydney’s most in-demand suburbs are spread throughout the city, from the Sutherland region in the south to the Northern Beaches, Outer West, Inner South West, the North, Eastern Suburbs, the city itself, and even the Central Coast.

In first and second place on the list, and significantly ahead of the rest, are Woronora and Burraneer, both waterfront suburbs in the Sutherland region.

Houses for sale in the riverfront suburb of Woronora, which has a $1.4 million median, have 149.6% more potential buyers than the median for the city over the past year.

Burraneer has 127.8% more potential buyers for its $3.2 million tightly-held waterfront houses.

There are a limited number of houses on the peninsula so there is a tight supply of properties for sale at any one time.

Third and fourth on the list are North Manly and Palm Beach, both in the Northern Suburbs.

North Manly’s $2.95 million houses have 74.1% more potential buyers while the $5.7 million beachfront houses on the highly sought-after Palm Beach peninsula have 71.1% more potential buyers.

sydney Tamarama

Elsewhere on the list, The Oaks, Sutherland, Abbotsbury, Sylvania Waters, North Avoca, and Castle Grove also make the list of the top most in-demand suburbs in Sydney for houses.

And it’s not just houses that buyers are desperate for either – some suburbs are seeing a surge in demand for units.

Caringbah South in Sydney’s Sutherland region is the most in-demand Sydney suburb for units with 118.2% more potential buyers for its $1.65 million units.

Meanwhile, the affluent habour-side suburb of Kirribilli has 101.8% more potential buyers for its $1.8 million units.

And the data isn’t just limited to Sydney’s richest suburbs either.

In third place for units is Padstow in Sydney’s inner south west – there are 100.9% more potential buyers for its $832,500 median priced units, according to the data.

The remainder of the list for in-demand suburbs for units comprises Naremburn, Hunters Hill, Concord, Clovelly, Waverton, Stanmore, and Earlwood.

Here’s the full list:

The most in-demand suburbs in regional NSW

According to PropTrack data, the bulk of the 10 most in-demand suburbs across the rest of New South Wales are all located in the Illawarra region, led by West Wollongong with 155.7% more potential buyers per listing compared to the median for regional NSW.

Bellambi, Balgownie, Mangerton, Kieraville, Towradgi, and Farmborough Heights, all in the Illawarra region, each have potential buyers for their houses in excess of 100% above the median.

Illawarra also leads the pack for most sought-after suburbs for units, taking 7 of the top 10 spots on the list.

sydney Mosman

In first and second place are West Wollongong and North Wollongong, which have median unit prices of $573,750 and $647,500 respectively, and 118.9% and 96.2% more potential buyers each respectively.

Suburbs in the Newcastle and Lake Macquarie region make up the remainder of the list – New Lambton Heights, Dudley, The Hill, and Elermore Value – with the addition of Shoal Bay in the Hunter Valley region for its demand for units.

Here’s the full list:

Location, location, location… and investment grade

While the demand in areas might make for a tempting investment, they aren’t necessarily the suburbs I would recommend investing in.

At Metropole, we always advise on the importance of investment-grade properties and locations, rather than chasing a hotspot or growth area.

That’s areas and properties which hold their value over the long term, rather than benefit from an uptick in demand.

But even before looking for the right location, make sure you have a Strategic Property Plan to steer you through the upcoming challenging times our property markets will encounter.

Because aside from remembering that you should focus your efforts on investment-grade properties and locations, you also need to remember that property investing is a process, not an event.

That means that things have to be done in the right order – and selecting the location and the right property in that location comes right at the end of the process.

And that’s because what makes a great investment property for me, is not likely to be the same as what would suit your investment needs.

About Robert Chandra
Robert Chandra is a Property Strategist at Metropole and has an intrinsic understanding of property markets backed by many years of real estate experience. This coupled with several degrees gives him a holistic perspective with which he can diagnose clients’ circumstances and goals and formulate strategies to bridge the gap.