Where are the best locations to invest in Sydney property in 2021?
The Sydney property market is forecast for strong growth in 2021-22, but as always, not all Sydney suburbs will perform the same, and if history repeats itself some properties will increase in value significantly over the year, (with some exhibiting double-digit capital growth) while others will languish and hardly grow in value at all.
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 Top Sydney suburbs for 2021 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 a 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.
And Covid reminded us of the importance of neighbourhood.
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 Covid19.
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.
Follow the demographics
According to leading demographer Bernard Salt, the coming of 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.
Now that all that is out of the way… let’s get into it.
This list will serve as a very useful guide for investing in the Sydney property market in 2021 – for long term growth as an experienced investor.
This list will also help you avoid making any costly mistakes.
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.
Each suburb 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+
Here is a list of 15 Investment Grade Sydney suburbs.
They are in no particular order however I have provided a ranking based on a number of metrics towards the end of the blog.
But remember… not all properties in the suburbs will make investment great properties, and even within the suburbs still be certain locations that must be avoided and other neighbourhoods which will outperform
1. Coogee
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
2. Kingsford
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
3. Kensington
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
4. Maroubra
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
5. Neutral Bay
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
6. Cammeray
Cammeray is a suburb on the lower North Shore of Sydney and 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
7. Balmain
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
8. Rozelle
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
9. Dulwich Hill
Dulwich Hill is a suburb in the Inner West of Sydney it is located south-west 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
10. Summer Hill
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.
The local council has defined a village character for the suburb.
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
11. Marrickville
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
12. Ashfield
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
13. Newtown
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.
- Distance from CBD: 4km South-West
- Total population: 14,148
- Median Household Income: $1753(weekly)
- Walk Score: 95 – Walkers Paradise
14. Kogarah
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
15. Bexley
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
Suburbs ranked based on Distance from CBD
| Suburb | Distance from CBD | |
| 1 | Neutral Bay | 1.5km |
| 2 | Rozelle | 4km |
| 2 | Newtown | 4km |
| 3 | Balmain | 5km |
| 3 | Cammeray | 5km |
| 4 | Kensington | 6km |
| 5 | Kingsford | 7km |
| 5 | Summer Hill | 7km |
| 5 | Marrickville | 7km |
| 6 | Dulwich Hill | 7.5km |
| 7 | Coogee | 8km |
| 7 | Ashfield | 8km |
| 8 | Maroubra | 10km |
| 8 | Kogarah | 14km |
| 9 | Bexley | 14km |
Suburbs ranked based on Walk Score
| Suburb | Walk Score | |
| 1 | Newtown | 95 |
| 2 | Balmain | 93 |
| 3 | Neutral Bay | 85 |
| 3 | Cammeray | 85 |
| 4 | Rozelle | 84 |
| 4 | Dulwich Hill | 84 |
| 4 | Kogarah | 84 |
| 5 | Kensington | 81 |
| 6 | Marrickville | 80 |
| 7 | Coogee | 79 |
| 7 | Kingsford | 79 |
| 8 | Summer Hill | 77 |
| 9 | Ashfield | 75 |
| 10 | Maroubra | 74 |
| 11 | Bexley | 71 |
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.
Changes in Sydney property prices over the past two years
Domain research reveals that across Sydney, from the trough of early 2019 through to the end of 2020, prices fell in almost every Sydney suburb.
But any house price fall instigated by the coronavirus pandemic was short-lived.
By the end of 2020, the median hit a new record high of $1,211,488, which is just over $13,000 above the previous peak mid-2017.
Over the past two years, property prices have risen across almost all Sydney suburbs, with 94% enjoying property price growth, and a huge 43% of suburbs even seeing double-digit annual growth.
Leading the suburbs seeing the greatest growth was Alexandria with prices soaring by 30.6%.
Meanwhile far behind the pack was Sydney’s suburb of Marsfield which suffered a 10.1% decline in property prices over the same period.
Elsewhere, Blackheath and Palm Beach are the only two suburbs that have shown stable and continued annual growth over the past two years.
Other suburbs have shown very minor annual price falls, largely Central Coast suburbs such as Charmhaven, Hamlyn Terrace and Wadalba, the research reveals.
NOW READ: Sydney property market forecast to grow strongly in 2021-2022
Now is the time to take advantage of the opportunities the current property markets are offering.
Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.
You can trust the team at Metropole to provide you with direction, guidance and results.
Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s exactly what you get from the multi-award-winning team at Metropole.
We help our clients grow, protect and pass on their wealth through a range of services including:
- Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! Click here to learn more
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'The 15 Best Suburbs to Invest in Sydney in 2021' have 5 comments
October 10, 2020 Nick F
What I don’t see in here is the annual yield for investing in these areas. I calculated that for Blacktown (Sydney), the average annual yield for investing into a 2 bedroom apartment is about 4%. To go into more detail, an apartment can be purchased for about $400000 and the weekly rent is about $400. The council rates, water rates and strata levy are about $5000 per year and for a 100% occupancy rate, the investment yield would be about 4%. What is the investment yield for Coogee? If it is less than 4%, clearly Coogee would represent a worse investment than Blacktown.
October 10, 2020 Michael Yardney
Nick – yield is a small part of the investment equation. Cash flow is short-term thinking, even though it’s critical to keep you in the game. Essentially capital growth gets you out of the rat race. Look at how Coogee property values have increased in price compared to Blacktown. At the same time rental growth has been significant in Coogee and minimal in Blacktown.
March 22, 2020 Michae A
These suburbs are great for investment if you have a 20% deposit.
For the majority of readers of this article is a dream that will never happen as it is intended on the RICH only given the choice of suburbs presented.
Would like to see some suburbs that people could actually afford as investments.
March 22, 2020 Michael Yardney
Michael I can understand what you say, and clearly Sydney is not a property market that everyone should be investing in.
At Metropole when we decide where to recommend our clients invest, there are three things we take into account.
1. Their budget and that is usually determined by the banks.
2. Location and we are not prepared to compromise on that
3. The right property in that location
If you can’t afford to buy an investment great suburb in Sydney, then you maybe better off buying in Brisbane – stick to the big capital cities rather than regional locations or secondary suburbs in the big capital cities.
October 23, 2020 Napena
I second your opinion. in additions the capital growth in these suburbs will not likely be as much as some of the developmental hotspots. Felt like the article was written in 1970″s.