Where are the best locations to invest in Sydney property in 2022?
Or is it too late to get into the Sydney housing market now that affordability is stunting price growth.
Clearly the strong price growth of Sydney experienced in 2021 was unsustainable, and now the "overall" Sydney market has been flat for most of 2022.
However it's a bit like putting one hand in a bucket of hot water and another hand in a bucket of cold water and saying "on average I'm comfortable."
There is not one to Sydney property market and there are still some areas with strong continuing demand which is likely to keep property prices growing.
More affluent homeowners are still out in droves and investors are returning to the Sydney property market driven bye less competition at a time when rents are increasing strongly.
The following list of 15 best investment suburbs in Sydney will help you avoid making any costly mistakes.
Each suburb is featured below:
- Is within 15km of the CBD
- Exceeds the Australian median household income of $1164.60, suggesting they all have an above-average household and disposable income.
- Has a DSR Score (Demand Supply Ratio) of Good or Above Average
- Has a population in excess of 6500
- Is ‘Very Walkable’ with a Walk Score of 70+
Now that I think of it, I feel like I am giving away quite a bit of intellectual property with this list however if it adds value than I have achieved my goal.
Remember: Not all properties in the suburbs will make investment grade properties, and even within the suburbs still be certain locations that must be avoided and other neighbourhoods which will outperform.
This list will serve as a very useful guide for investing in the Sydney property market in 2022 - for long term growth as an experienced investor.
Coogee is a gentrified coastal suburb South-East of Sydney CBD which will see the benefits of infrastructure projects over 2020.
The South-East Light Rail project is a $2.2B project and will see a 12km light rail network connect Circular Quay to Kingsford.
In addition to the light rail, a $5M upgrade of the Coogee Bay Road town centre commenced in September 2018.
- Distance from CBD: 8km South East
- Total population: 14,012
- Median Household Income: $2099 (weekly)
- Walk Score: 79 – Very Walkable
Kingsford is a residential suburb, South East of Sydney CBD and situated directly south of the University of New South Wales.
It has cultural amenities along Anzac Parade and Gardners Road and is less than 5 km from Coogee Beach.
Kingsford will also benefit from the South-East light rail project with a direct connection to the CBD.
- Distance from CBD: 7km South East
- Total population: 14,100
- Median Household Income: $1227(weekly)
- Walk Score: 82 – Very Walkable
Kensington is located South-East of Sydney CBD in the local government area of the City Of Randwick.
Kensington lies to the immediate south of Moore Park and west of Randwick Racecourse.
The principal landmarks of the suburb are the main campus of the University of New South Wales, National Institute of Dramatic Arts (NIDA) and the exclusive Australia Golf Club.
Kensington will also benefit from the South-east light rail project.
- Distance from CBD: 6km South East
- Total population: 12,776
- Median Household Income: $1498(weekly)
- Walk Score: 81 – Very Walkable
Maroubra is a beachside suburb in the Eastern Suburbs of Sydney and located South-East of Sydney CBD.
Maroubra is the largest suburb in the area governed by Randwick City Council in both area and population.
- Distance from CBD: 10km South East
- Total population: 29,594
- Median Household Income: $1428(weekly)
- Walk Score: 74 – Very Walkable
Neutral Bay is a harbourside suburb on the Lower North Shore of Sydney.
It is north of Sydney CBD in the local government area of North Sydney Council.
Surrounding suburbs include Cammeray, Milsons Point and Cremorne.
- Distance from CBD: 1.5km North
- Total population: 9384
- Median Household Income: $2073(weekly)
- Walk Score: 85 – Very Walkable
Cammeray is a suburb on the Lower North Shore of Sydney and is located North of Sydney CBD.
The majority of residences are in the form of stand-alone or semi-detached, single or double-storey houses.
Many of the quieter streets are lined with trees and have nature stips.
This gives Cammeray a pleasant green look.
- Distance from CBD: 5km North
- Total population: 6783
- Median Household Income: $2239(weekly)
- Walk Score: 85 – Very Walkable
Balmain is an affluent neighbourhood west of Sydney CBD with a trendy restaurant scene.
Relaxed pubs and cafes occupy Victorian buildings on Darling Street, alongside boutique stores, artisan bakeries and happening eateries.
Well-heeled families, artists and media figures reside in the restored sandstone workers’ cottages lining the leafy streets and stalls at Saturday’s Balmain Markets sell organic food, crafts and fashion.
- Distance from CBD: 5km West
- Total population: 9783
- Median Household Income: $2456(weekly)
- Walk Score: 93 – Walkers Paradise
Rozelle is a gentrified residential suburb in the inner-west of Sydney CBD.
Strong in cultural amenities with cafes and restaurants along Darling Street, it is a destination suburb due to its boutique stores and eateries.
- Distance from CBD: 4km West
- Total population: 7919
- Median Household Income: $2598(weekly)
- Walk Score: 84 – Very Walkable
Dulwich Hill is a suburb in the Inner West of Sydney is located southwest of the Sydney CBD.
Dulwich Hill stretches south to the shore of the Cooks River and is an established residential area with many examples of federation Architecture.
The streets are wider than many inner-city suburbs and houses are bigger than some older, neighbouring suburbs such as Petersham.
- Distance from CBD: 7.5km South-West
- Total population: 12,981
- Median Household Income: $1540(weekly)
- Walk Score: 84 – Very Walkable
Summer Hill is a residential suburb located west of Sydney CBD with surrounding suburbs being Lewisham, Haberfield and Ashfield.
Summer Hill has a mix of Federation-era houses, with medium density apartment blocks near the railway station.
It has a family-friendly vibe and village atmosphere while still having proximity to Sydney CBD.
The local council has defined a village character for the suburb and Summer Hills personifies Inner West living at its finest with plenty of local eateries, world-class cafes and green spaces and parks.
Summer Hill is a suburb rich in heritage with more than one hundred properties being heritage listed.
- Distance from CBD: 7km West
- Total population: 6586
- Median Household Income: $1570(weekly)
- Walk Score: 77 – Very Walkable
Marrickville is a gentrified suburb in the Inner West of Sydney and located south-west of the Sydney CBD.
It is the largest suburb in the inner-west and sits on the northern bank of the Cooks River.
It is a diverse suburb consisting of both low and medium density residential, commercial and light industrial areas.
Many Marrickville homes are detached or terraced Victorian houses built in the late 19th century while many others were built in the Federation style in the early 20th century.
- Distance from CBD: 7km South-West
- Total population: 24,612
- Median Household Income: $2324(weekly)
- Walk Score: 80 – Very Walkable
Ashfield is a suburb in the Inner West of Sydney and located south-west of Sydney CBD is relatively high for Australia, with the majority of the area's dwellings being a mixture of mainly post-war low-rise apartments and federation-era detached houses.
Amongst these are a number of grand Victorian buildings that offer a hint of Ashfield's rich cultural heritage.
- Distance from CBD: 8km South-West
- Total population: 22,190
- Median Household Income: $1314(weekly)
- Walk Score: 75 – Very Walkable
Newtown is a diverse, bohemian neighbourhood that bustles with activity day and night.
Shoppers head to King Street’s indie bookshops and thrift stores.
Hip bars and eateries with multicultural fare cater to locals and University of Sydney students and The Enmore Theatre hosts comedy revues and live music.
Restored Victorian buildings and street art, including a mural of Martin Luther King, round out the scene.
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- Distance from CBD: 4km South-West
- Total population: 14,148
- Median Household Income: $1753(weekly)
- Walk Score: 95 – Walkers Paradise
Kogarah is a residential suburb of southern Sydney located south of the Sydney CBD and is considered to be the centre of the St George area.
Kogarah's main shopping area is located around Kogarah railway station on Railway Parade, Regent Street and on the opposite side of the railway line on Station Street.
- Distance from CBD: 14km South
- Total population: 12,763
- Median Household Income: $1238(weekly)
- Walk Score: 84 – Very Walkable
Bexley is a suburb in southern Sydney located south of the Sydney CBD in the local government area of the Bayside Council and is part of the St George area.
Bexley contains a mixture of residential, commercial and light industrial developments and its main shopping strip (usually known as the 'Bexley Shopping Centre') is located on Forest Road.
- Distance from CBD: 14km South
- Total population: 19,067
- Median Household Income: $1358(weekly)
- Walk Score: 71 – Very Walkable
|Suburb||Distance from CBD|
As a property investor and similarly as a homeowner, it is important to note that location accounts for 80% of the properties performance and 20% come from the property itself.
Meaning that with the correct location and property selection you can find an investment-grade asset that well and truly outperforms the averages in growth.
Here we have pulled together the latest data on the median property price for Sydney.
|Median/average value/price||MoM change||QoQ change||Annual change|
|Capital city dwellings||$1,090,276||0.9%||4.3%||25.8%|
|Capital city houses||$1,360,543||1.0%||4.7%||30.4%|
|Capital city units||$837,169||0.7%||3.4%||15.2%|
But there is still plenty of growth and opportunity left in the Sydney housing market.
As always, not all Sydney suburbs will perform the same, and if history repeats itself some properties will increase in value significantly moving forward while others will underperform.
So this blog is going to be a little different from my other blogs.
Purely because I write this blog with a level of hesitation.
And the reason I have a level of hesitation is that whenever I see a blog written with the title “Top Hotspots for 2021” or “Property Investment Hotspots” it usually makes me cringe.
So let me preface by saying… this is NOT one of those blogs.
You see, being a property strategist means that I must approach every client’s position not only strategically but individually.
Every client has unique circumstances, goals and aspirations and there is never a blanket approach to investing.
Furthermore, I do not believe in hotspots or investing in an area just because it is expected to be the “Next Best Thing”.
“Hot-spots” tend to be “not-spots” and I’m a long-term investor, meaning I take calculated risks, I do not gamble.
Therefore, providing a macro strategy about the best Sydney's suburbs is not as easy as it sounds.
So, let’s approach this with the following expectations:
- The suburbs I have featured have all been strong and stable suburbs that have both shown consistent historical growth but also have the right demographics to suggest future long term growth.
- The suburbs I feature are all located within the inner-middle rings of Sydney so that we can avoid any hot-spotting or speculative investing. These are all proven investment grade suburbs.
- Yes, there are some suburbs outside of this list that has shown higher short term growth but the suburbs listed are long term performers based on a number of metrics intended for safe and long term growth, not short term and risky “get rich quick” approach.
- Every client I see may be provided with a different recommendation based on their circumstances and personal goals.
The ability to work, live and play all within 20 minutes’ reach is the new gold standard desirable lifestyle.
It seems that in our new “Covid Normal” world, people love the thought that most of the things needed for a good life are within a 20-minute public transport trip, bike ride or walk from home.
Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs.
But this is nothing new…the rise of the 20-minute neighbourhood started long before Covid 19.
You will find these are often in the gentrifying aspirational lifestyle suburbs of our capital cities and people will pay a premium to either own a property in these locations or rental property in these locations.
Many inner suburbs of Australia’s capital cities and parts of their middle suburbs already meet a 20-minute neighbourhood test.
However very few of the outer suburbs would do so.
According to leading demographer Bernard Salt, the coronavirus has changed the Australian workforce and not just by prompting adaptation to new technology like Zoom calls and triggering a work-from-home movement, but also by rigidly dividing the nation according to skill sets.
The Australian Bureau of Statistics classifies every job according to one of five skill levels with Skill Level 1 being the most skilled.
It is well recognised that the rich – such as people with a Skill Level I job - are getting richer, and at the other end of the spectrum, Skill Level 5 jobs requiring little or no previous work experience (like general sales assistant, kitchen hand) are experiencing no wages growth.
A Skill Level 1 job requires a bachelor’s degree or higher, or the equivalent of at least five years’ training.
People with these types of jobs will earn more income and be able to afford to pay more for their properties.
The pandemic cricket demand for skills in finance (accounting), risk management (solicitors), computer programming and many other skill levels one jobs.
However, the story for the balance of the workforce has been quite different.
So understanding where the skill level one worker lives in Sydney is critical and be seen in the following graphic provided by Bernard Salt in The Australian.
Domain's latest house price report shows that:
- House prices nudged 0.2% higher over the quarter to $1.59 million, it is the weakest outcome since prices declined in the June quarter of 2020. This has slowed the annual growth rate to a 12-month low, at 21%.
- Unit prices declined 1.2% to $796,524, although they remain 4.8% higher than a year ago. This is the first quarterly decline since the June quarter of 2020.
- Sydney’s premium price point is leading the downturn with houses falling by 6.5% over the March quarter and units down 6.9%.
- House prices declined over the quarter in the City and Inner South, Eastern Suburbs, Northern Beaches, Parramatta, Sutherland, and Ryde.
- Unit prices fell or held over the quarter across all areas of Sydney, apart from the Central Coast and Outer South West.
House prices flatlined and unit prices declined to provide the weakest outcome since the June quarter of 2020 and one of the most significant slowdowns in all the capital cities.
The premium price-point of Sydney’s housing market is leading the downturn as tends to historically be the case.
A year ago, house prices were rising 46 times the current pace, at 9.2% over the March quarter of 2021.
At the same time, unit prices were increasing by 2.2%, the reverse of the current negative growth trend.
This is a clear sign that Sydney’s housing market has moved through its peak growth rate, on a quarterly basis hitting a high in mid-2021.
It is further evidenced by the annual growth trend of house prices dropping significantly to 21% in March 2022 from the steepest incline on record at 32% in December 2021.
Over the 12 months to March 2022, this has added approximately $277,000 to the median house price but this is a 12-month low and will continue to steeply drop due to the rapidly weakening quarterly growth.
Despite house prices losing greater momentum they continue to outperform units over the quarter and have grown over four times faster over the past year, a divergence that retains a record price gap between property types.
The median house price in Sydney is double the median unit price, with a dollar premium of around $794,000. This is up from 54% prior to the pandemic, or $409,000.
Growing evidence confirms Sydney's steepest upswing on record has ended and swinging power back towards buyers.
This has created better purchasing conditions providing buyers time to contemplate rather than compromise, and ultimately allowing rational decisions to be made.
A fundamental driver of Sydney’s upswing was a lack of supply at a time of strong demand but the supply-demand dynamics have been shifting. 2022 saw the highest number of newly advertised homes for sale over a March quarter since 2014, soaring 15% above the five-year March quarter average.
It is clear sellers have become motivated and are strategically timing a sale while prices are at, or are close to a peak and prior to a tightening rate cycle that will impact borrowing capacity and the cost of a mortgage.
At the same time, affordability is already having an impact on upgraders and first-home buyers as the value of home loans ease from the 2021 peak, down 13% and 35% respectively.
Although the value of investment loans hit a high in 2022.
The auction market is a shining example of the shifting conditions, it was the busiest March quarter on record but clearance rates have dropped to 65% compared to the 81% outcome for the same time last year.
This changing balance is slowly rippling across Sydney, sellers are having to be more realistic with pricing and cautious buyers are armed with greater choice
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