Sydney suburbs where house prices rose – and fell – most

“Some of those affordable areas might not even see a dip in price because of their affordability. Affordable areas are highly sought-after, they’re competitive; people want their own home.”

But she added that inner neighbourhoods such as Coogee are coveted by deep-pocketed buyers willing to compete regardless of market dynamics.

Meanwhile, house prices have fallen in multimillion-dollar suburbs such as Vaucluse (down 12.8 per cent to a median $7.5 million), Surry Hills (down 8.2 per cent to $2.1 million), Cronulla (down 6.7 per cent to $2.8 million) and Woollahra (down 4.1 per cent to $4,075,000).

Powell said these areas had a median house price well above greater Sydney’s and may have some compositional change – owners of the most expensive properties can afford not to sell during a weak patch, so sales of lower-priced homes bring down the median.

“These are locations that saw extreme rates of price growth during the upswing,” she said. “I suspect we are going to see deeper drops than this.”

In Sydney’s west, Laing+Simmons Cabramatta’s Sonny Tran has noticed greater buyer demand over the past few months, including from downsizers looking to move to the area and live close to their children.

“The suburb has everything you need. There’s good food, culture, and public transport has improved. However, we have been seeing parents return to Cabramatta to retire and be closer to their children as the travel can be quite a lot,” he said.

“We are seeing buyers come from all over Sydney.”

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In Sydney’s inner suburbs and east, buyer’s agent Stuart Jones said some buyers were price-sensitive during the cost-of-living crisis.

“If they’re not move-in ready and there’s work to do, or the buying market feels there’s work to do, or they can’t afford to pay the ask or deposit … they are forced to wait for their price or meet the market,” he said.

“It’s getting harder and harder for people to pay the prices the vendors want.”

Jarrod Miles and his partner have been trying for six months to buy their first home.

They also tried at the beginning of the COVID-19 pandemic, but prices in the Sutherland Shire, where they were looking, soared.

They are now looking to northern Wollongong for better value.

“When we first started, they were around $1 million. This was pre-COVID, that would get you a decent place [in Engadine],” the 29-year-old builder said.

Now, comparable houses sell from high $1.2 million to $1.4 million.

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“I just didn’t think it was worth paying that to live in Engadine, so we decided to go closer to the beach down south with the same sort of budget.”

His mortgage broker, Anthony Landahl, managing director of Equilibria Finance, said rising interest rates reduced the amount of money buyers could borrow by up to 40 per cent.

This affected the type of property and location they could consider. Some compromised to a townhouse instead of a house, others moved three to four suburbs out or even sea-changed out of Sydney.

“Previously, if someone was borrowing $800,000, they might now only be able to borrow $500,000 or $600,000,” Landahl said.

“This was all while there was a growing market. The cost of houses were going up, and the amount people could borrow was falling.”