Sydney’s hidden housing crunch: the tightest suburbs for home buyers are not where you think

Key takeaways

The inner west, eastern suburbs, and northern beaches of Sydney are identified as the most challenging markets for homebuyers in Australia, with only 0.3% of homes available for purchase.

Areas like Rockbank in Melbourne's west and Leppington in Sydney's south-west contrast with tight markets, boasting higher availability due to new housing developments.

Early indicators suggest promising demand levels that could meet the surge in listings, indicating potential stability in the market.

In an eye-opening analysis, Sydney's inner west, eastern suburbs, and northern beaches emerge as the most challenging markets for homebuyers in Australia.

Astonishingly, a mere 0.3% of the total homes in these areas are available for purchase.

This insight comes from Louis Christopher, the managing director of SQM Research, who noted a staggering 30% drop in listings over the past year, sharply contrasting with Sydney's overall 21% increase in new property listings.

Spotlight on the tightest markets

Delving deeper, of the 60 most undersupplied suburbs nationwide, 51 are in Sydney, with two in Melbourne and seven in Adelaide.

In these areas, the market availability hovers at a scant 0.59% of the total housing stock.

For context, a typical suburb turnover is about 1.2% of its dwellings, as per Christopher's findings.

The surprising dominance of Sydney postcodes in these tight localities, despite the city's rising stock levels, hints at a deeper issue.

High stamp duty in NSW appears to be a significant deterrent, contributing to a structural, rather than purely cyclical, decline in the local housing market.

In the inner west, Stanmore leads with only nine homes available for sale out of 3,588 – a minuscule 0.25%.

The past year saw a 30.8% drop in listings here, with a more than 50% decline over three years.

Other areas facing similar crunches include Curl Curl, Killarney Heights, and Brookvale in the northern beaches, along with Clovelly and Coogee in the eastern suburbs.

This scarcity inevitably limits options for buyers and could drive prices up in the medium to long term, especially with steady population growth.

Buyers, particularly in the inner west, tend to invest for the long haul, driven by lifestyle choices rather than short-term gains.

In stark contrast, some areas like Rockbank in Melbourne's west and Leppington in Sydney's south-west are flush with listings, attributed to new housing developments.

For instance, 28% of Rockbank's homes were on the market, marking a 31% increase over the past year.

What lies ahead

Looking ahead, Christopher anticipates a significant jump in listings from February onwards.

This upcoming influx will be a crucial test for the market’s capacity to absorb new supply.

Early indicators show promising demand levels that could well meet the surge in listings.

About Leanne Spring Leanne is a highly experienced Buyers Agent in the Brisbane Real Estate market. Leanne became a passionate lover of property in 2001. Since then, both professionally and personally, she has been involved in all aspects of property including purchasing, negotiating, renovating, and selling.