Home prices soar in parts of Sydney’s west, plummet in north and northwest

PropTrack’s latest home price index released Wednesday showed prices soared by double digit margins over the year to August in Sydney’s southwest, Parramatta region and inner southwest.

The inner southwest, including Canterbury-Bankstown and much of the St George area, had the biggest rise at 10.42 per cent.

This was followed by the southwest, which encompasses Liverpool and Fairfield, among other areas – with average dwelling growth of 10.36 per cent.

Home price rises varied across Sydney regions.

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These rises were substantially higher than the 6.1 per cent lift in home values across Greater Sydney for the year, according to the PropTrack index.

The research company indicated prices continued to tick up over the normally quieter winter period, with July recording an average increase of 0.12 per cent.

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The rises came despite higher interest rates thinning the pool of buyers able to afford city prices.

PropTrack economist Paul Ryan said part of the reason prices rose was because many of the most active buyers in the market were upgraders using equity to fund their purchases.

“These are buyers who are not as affected by interest rate rises,” he said.

“They are in a good position to buy and they would have been supported by good economic conditions and certainty in their job prospects.”

House price changes across Sydney regions over the past year.

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He noted that many of these buyers would have got an additional boost from recent stage 3 tax cuts, while wage growth has been higher in recent months.

Sydney’s ongoing building challenges were putting additional strain on prices and meant well-heeled upgraders were often competing with first-home buyers for the scant supply of available homes.

Mr Ryan said there was a general trend of price rises slowing in more expensive regions while accelerating in more affordable areas over the past year.

He attributed this to a flight to affordability as home seekers constrained by higher interest rates branched out to markets where they could get more bang for their buck. The resulting competition for housing lifted prices.

PropTrack economist Paul Ryan said there was a flight to more affordable suburbs.

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Prices in Sydney’s Hill District were up 3.93 per cent annually, but they recorded the biggest drop over the last quarter at 0.26 per cent. There was a similar trend on the north shore – prices were up 3 per cent for the year, but down 0.03 per cent for the quarter.

It comes as ABS figures released Tuesday showed inflation rose 3.8 per cent over the year to June – largely in line with Reserve Bank forecasts.

Experts said this would make another interest rate hike in August unlikely.

With interest rates staying level, Mr Ryan said he expected prices to continue growing “moderately” over the coming months.

“This would change if there was another rate hike but at the moment this is looking unlikely.”

ANNUAL PRICE CHANGES BY SYDNEY REGION

Inner South West 10.42%

South West 10.36%

Parramatta 9.88%

Blacktown 8.74%

Inner West 8.09%

Sutherland 6.59%

Outer West and Blue Mountains 6.04%

Outer South West 5.89%

Eastern Suburbs 4.96%

City and Inner South 4.52%

Northern Beaches 4.28%

Ryde 4.11%

Hills District and Hawkesbury 3.93% (-0.26% for quarter)

North Shore 3.07% (-0.03% for quarter)

Source: PropTrack Home Price Index