Suburbs in the middle and upper end of the Sydney property market are expected to grow by as much as nine per cent in the next six months, far more than more affordably priced homes according to a new report.
The Shore Financial State of Sydney Report predicts the affluent suburb of Naremburn on the Lower North Shore, which boasts a median price of $2.95 million, could grow by as much as nine per cent in the next six months.
While the best-performing low-priced suburbs might only grow two per cent.
The analysis focused on current inventory levels and the level of sales, to predict areas that were ripe for short-term growth.
Fairlight, in the Northern Beaches, is expected to see solid growth of six per cent over the next six months, along with Turramurra and Chatswood at five per cent.
The slightly more affordable suburb of Beecroft is predicted to grow seven per cent, while Camperdown, with a median price of $1.81 million, could see six per cent growth.
While Berala and Belmore are also predicted to see prices increase six per cent in the next six months.
Of the suburbs considered affordable, Blacktown is the only suburb expected to see prices increase two per cent in the next six months.
Shore Financial CEO Theo Chambers said the upper end of the market is driving growth at the moment.
“The outlook differs from suburb to suburb,” Mr Chambers said.
“Our research shows that wealthier suburbs, like Naremburn on the North Shore and Fairlight on the Northern Beaches, are likely to record stronger growth over the next half-year than less affluent suburbs like Busby and Green Valley in the city’s west.
“It’s also important to realise that while prices are rising across Sydney as a whole, they’re not rising in every single suburb.”
He said it appears that the Sydney market has now turned the corner after a period where prices were declining.
“Twelve months ago, prices were falling in most suburbs across Sydney,” he said.
“Six months ago, the turnaround had just begun, but it was too early to know for sure.
“Now, though, we can say with certainty that Sydney is in growth mode.”
Mr Chambers said tight stock levels and strong buyer interest have contributed to the turnaround in prices.
“During the past six months, we’ve seen days on market and inventory levels fall in many parts of Sydney,” he said.
“In other words, market conditions have swung from buyers to sellers, which has been reflected in rising asking prices.
“That said, it’s important not to get carried away because there’s a difference between a rising market, which we’re in, and a booming market, which we’re definitely not in.”
He said tight stock levels have been a feature of suburbs experiencing growth.
“One of the key leading indicators is the low levels of inventory in these suburbs,” he said.
“Demand pressures are building, which is likely to lead to above-average price growth.”