NSW Real Estate Market & House Prices
There is no doubt that the NSW real estate market is one of the hottest in the country. Investors from all over Australia are flocking to the state in search of good returns, and they are certainly finding them.
New South Wales is a great place to do business, with a range of advantages that make it an attractive destination for investment. These include a skilled workforce, a favourable business environment, a diverse range of industries, and strong economic growth.
The state government is committed to growing the economy and creating jobs. The government’s economic plan includes initiatives to attract investment, boost productivity, and encourage innovation.
If you’re thinking of investing in the New South Wales property market, it’s important to do your research first. There’s a lot of opportunity for investors, however data-driven market due diligence is a must before moving on with property search.
The heatmap above showcases the annual house price changes in New South Wales. Darker blues represent higher growth, while lighter blues signify lower growth. This data is refreshed each month for the most current analysis.
Get an different perspective with the Lower Risk view, which presents areas with a lower risk as more vivid. This risk score ranges from 1 – 100 and is determined by a variety of risk factors, such as statistical data, market conditions, and environmental exposures. Learn more about HtAG’s property market risk criteria here.
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Snapshot of Key Metrics & Market Comparison Table
We start with a snapshot of the New South Wales market that provides an overview of key real estate metrics. The data in this snapshot illustrates typical price, median rent and gross yield metrics for the entire state.
Use the Houses/Units toggle buttons below to view the market snapshot for different property types in New South Wales. Houses are free standing houses (excl. townhouses and villas). Units are apartments, studios, flats, units (excl. unit blocks).
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Rent
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Rent
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Yield
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You are able to drill down to LGA-level data and charts which visualise these 3 key metrics as well as other important indicators in the table that follows.
Enable additional columns in the table by clicking on the buttons underneath it. Toggle between LGA and Suburb views in the table’s navigation bar. The data in the table represents key real estate metrics as of the current month and is updated at the end of every month.
Clicking on an LGA or Suburb links in the table will take you to the relevant LGA page where you can drill-down to the next level of data.
NSW House Prices
NSW real estate market is reaching new highs, with prices in Sydney and regional markets at record levels. The strong price growth is being driven by strong economic conditions in NSW. This is good news for property investors in NSW, as the state’s economy continues to grow strongly.
The typical house in the New South Wales have seen plateaus with no significant peaks and throughs over the past 10 years.
The interactive chart below shows typical price for both houses and units as well as the sales volume per month. Toggle additional views of prices per number of bedrooms by clicking on BR2, BR3 etc underneath the graph. You can also drill down to LGA charts using the dropdown in the chart navigation bar.
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There are a number of factors driving the increase in New South Wales house prices. The state has experienced strong economic growth in recent years, with employment levels rising and wages growing.
This has led to more people having the financial security to purchase a home. Additionally, population growth in New South Wales has been outpacing the supply of new homes, resulting in increased competition for properties and higher prices.
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NSW Rental Prices
It’s not just house prices that are on the rise in NSW, either. The rental market is also booming, with the median rent reaching new peaks. This is great news for investors, as it means that there is strong demand for rental properties.
Use the interactive chart below to explore the rental prices in New South Wales in detail.
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So what’s causing this increase in rental prices?
Firstly, there’s been an increase in the number of people moving to NSW, particularly to Sydney. This has put pressure on the already tight rental market, driving up prices.
Secondly, there’s been a decrease in the number of properties available for rent. This is due to a number of factors, including an increase in the number of people buying homes and a decrease in the number of properties being built.
There’s no doubt about it, rental prices in New South Wales are high. And they’re only getting higher.
Gross Yield on Investment Properties in NSW
Gross yield is the percentage of the purchase price that the investor receives in income each year. In New South Wales, gross yields for property investment ranges from 1% to 8.7% depending on the location. Lower priced suburbs typically offer higher yields. However, there are exceptions to this rule.
Despite the lower number of LGAs offering adequate gross yield, investment properties in New South Wales continue to offer a higher return than most other types of investments. For investors looking for a stable and high-yielding investment, properties in regional New South Wales are an excellent option.
Explore the chart below to visualise the gross yield trends for NSW LGAs in detail.
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NSW Property Type Demand Profile
The most popular type of dwelling varies somewhat between different regions of NSW. In general, detached houses are the most common type of dwelling in rural areas, while townhouses and apartments are more common in urban areas.
As far as residential property market is concerned, the most in-demand NSW real estate are 3 and 4 bedroom houses, followed by 2 bedroom units. The units are dominant in CBD of urban centres, whereas other LGAs are mostly rural and have 3 and 4 bedroom house preferences.
Use the chart below to understand which property types have the highest demand in New South Wales real estate market.
One reason for the popularity of detached houses is that they offer more privacy and space than other dwelling types. This is particularly appealing to families with children, who often prefer to have their own backyard and space to move around.
Apartments are a popular choice for those who want to live in an urban area, as they are often close to public transportation and other amenities.
Townhouses are also a popular choice for urban dwellers, as they offer more space than an apartment and are often more affordable.
Semi-detached homes are a good option for families or those who want more space, as they typically have two or more bedrooms and a backyard.
The New South Wales is a large and diverse area, so the property people search for vary depending on the location. Be sure to explore the data to understand dwelling type preferences in each of the state’s LGAs.
NSW Buy & Rent Search Index
As the world increasingly moves online, more and more people are using the internet to search for properties. This is especially true in NSW, where the property market is extremely competitive.
This increase in online search interest is likely due to a number of factors, including the increasing popularity of online property portals like realestate.com.au and domain.com.au, as well as the increasing use of mobile devices to search for property.
The chart below illustrates the trends for “buy” and “rent” online searches in New South Wales. You’ll notice that searches for rental properties have increased over the years. Both “Buy” and “Rent” searches peaked towards the end for 2020 and have since returned to average historical levels.
The black lines on the chart highlight the search index, which is calculated by apportioning the LGA “buy” or “rent” searches to the state average.
The overall search index for NSW is calculated as an average of all LGA indexes.
Online search interest for renting in NSW has also increased significantly in recent years, as more and more people are looking for an affordable place to live.
This is good news for both buyers and sellers in the NSW property market, as it means that there is a growing pool of potential buyers who are using the internet to search for properties. This is especially important for sellers, as they can use this to their advantage by making sure their property is listed online and easily searchable.
NSW Market Growth Rate Cycles
There is no doubt that the NSW property market has seen some strong growth cycles over the past few years. This has been driven by a combination of strong economic conditions, low interest rates and strong population growth.
The New South Wales property market has entered the growth phase in early 2020. The market has been performing well since then, with house prices and rents increasing. The market is expected to continue to grow in the short-term.
The chart below illustrates the year on year changes in NSW property prices. We can see that the NSW housing market was in decline 2018-2019, with house prices in some LGAs dropping by as much as 8%.
A similar pattern can be observed for units with trough in some LGAs reaching negative 5% in 2018-1019.
Confidence: High, Medium, Low
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The New South Wales property market is one of the most diverse in the country. Property values in the state can experience significant swings in value, depending on the location and the type of property.
It is important to remember that all markets go through cycles of growth and decline. So, while the current conditions are favourable for property investment, it is important to be aware that the market will eventually cool off.
That being said, there are still plenty of opportunities for those who are looking to invest in the NSW property market. With population growth continuing to drive demand for housing, and interest rates remaining at historically low levels, there is still plenty of potential for capital growth.
Ratio of Renters to Owners in NSW LGAs
A high renter to owner ratio indicates that there are more renters than owners, which could be a sign that the market is unaffordable for many people. A low renter to owner ratio, on the other hand, could indicate that the market is ripe for investment.
Furthermore, the importance of having more owners than renters in a property market is that it gives people a sense of stability. Owners are incentivised to maintain their property and contribute to the community, increasing the appeal of the neighbourhood as a whole.
The current renter to owner ratio in NSW is in line with the national average. However, it is worth noting that the ratio has been steadily rising over the past few years. Generally speaking, the number of renters has increased at a faster rate than the number of owner-occupied homes.
The increase in the number of renters is being driven by a combination of factors, including rising house prices, stagnant wages growth and tighter lending standards.
For some people, renting is now the only option – either because they can’t afford to buy or because they don’t have the required deposit.
The high cost of renting can also have a flow-on effect on other areas of life, such as saving for a deposit for a home loan.
As a rule of thumb, there should be no more than 45% renters in an area for it to be considered to have a good investment potential. Interestingly the overall percentage of renters in NSW is at 29% which is well below the threshold.
Ratio of Units to Houses in NSW
The ratio of apartments to houses in New South Wales has been steadily increasing over the past few years.
There are a few reasons for this increasing trend. Firstly, the population of New South Wales has been growing steadily over the years. This means that there is a greater demand for housing overall, which has lead to an increase in the construction of both houses and apartments.
Another reason for the increasing ratio of apartments to houses is that apartments are generally more affordable than houses. This is especially true in Sydney, where the price difference means that more people are opting to purchase or rent an apartment instead of a house.
The increasing ratio of apartments to houses in New South Wales is having a few impacts on the state. However, compared to other states and territories, the overall ratio of units to houses is well under the threshold at with just 16% of dwellings sold being units.
Firstly, it is leading to an increase in urbanisation as more people are living in close proximity to one another in apartment buildings. This is having an impact on the way that people live and interact with one another.
Secondly, the increasing ratio of apartments to houses is having an impact on the property market. Houses are becoming more expensive relative to apartments, which is making it more difficult for first home buyers to enter the market. This is likely to have a flow-on effect to the rental market, as more people are likely to rent an apartment instead of purchasing one.
NSW Property Market Socio-Economics
NSW is one of the most socio-economically advanced states in Australia. It has the highest GDP per capita and the lowest unemployment rate in the country. The state also has the highest rate of home ownership and the highest median household income. These factors all contribute to NSW being one of the most desirable places to live in Australia.
The most affluent LGAs are generally found in the Sydney metropolitan area, particularly in the eastern and northern suburbs. These LGAs have high median incomes and low levels of unemployment and crime. They also tend to have high levels of educational attainment and good access to amenities and services.
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People in the higher socio-economic status are more likely to be able to afford to purchase and rent property in the area. This helps to increase demand for rental properties in the market and frequently attracts high-quality long-term tenants.
The most disadvantaged LGAs are generally found in regional areas, particularly in the western and southern parts of the state. These LGAs have lower median incomes and higher levels of unemployment and crime. They also tend to have lower levels of educational attainment and poorer access to amenities and services.
There are a number of factors that contribute to the socio-economic status of LGAs in New South Wales. These include the industries that are prevalent in each area, the skills and qualifications of the local population, the availability of jobs, the cost of living, and the quality of life.
The socio-economic status of LGAs in New South Wales has a significant impact on the wellbeing of residents. Areas with higher socio-economic status tend to have better health outcomes, higher life expectancy, and lower levels of crime. They also tend to have higher levels of educational attainment and higher rates of employment.
If you’re thinking of buying a property in NSW, it’s important to do your research and know the socio-economic status of the property market you’re considering to invest in.
Conclusion
The NSW real estate market is one of the most sought after in the country. Investors have benefited from the skilled workforce, favourable business environment, diverse range of industries, and strong economic growth.
Property values have gone up and down in the last 10 years but are generally on an upwards long-term trend with great potential. House prices have reached record highs, supported by strong economic conditions and rental prices are increasing due to population growth. Gross yield is generally low, but regional NSW offers higher returns.
Online searches for properties are increasing, favouring the buy search index over rent in NSW LGAs. Market growth cycles point towards increased capital gains and socio-economics in NSW suggest high standards of living.
Relying on RCS™ from HtAG Analytics simplifies the analysis process by giving you a complete view of the Australian property market in seconds. Combining multiple traditional data points into a single score, users can quickly analyse risk, capital growth, and cashflow potential.
Plus, with access to specific submarkets such as houses and units, users can optimise their investment strategies. Our monthly data refresh ensures the real-time information is always accurate. At HtAG Analytics, we’re dedicated to providing our users with all the market insights they need to make sound decisions.
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More about New South Wales Property Market
The NSW Government has committed to upgrading the state’s infrastructure to ensure it can accommodate future population growth and economic activity. Major infrastructure projects that are planned or underway include major transportation upgrades. You can find out more about current and planned projects by visiting the NSW government website.