Inflation bombshell shows rate hikes backfiring<\/a><\/p>\nIt follows PropTrack figures released last week that showed house values dropped in 91 per cent of Sydney suburbs over the July quarter.<\/p>\n
There were about 400 suburbs that recorded a median drop greater than $50,000, including about 200 suburbs where the drop was over $100,000.<\/p>\n
Most of the Sydney areas deemed \u201covervalued\u201d, with prices much higher than what local metrics suggested was sustainable, were up-market suburbs in the east, north shore and northern beaches.<\/p>\n
Notable overvalued suburbs were beach suburbs Collaroy, Avalon Beach, Palm Beach, North Manly and South Coogee, according to the SuburbData research.<\/p>\n
Other suburbs flagged as overvalued were out west, including St Johns Park, Wakeley and Old Guildford in the Fairfield region and Ashcroft, near Liverpool.<\/p>\n
![\"\"\/](\"data:image\/svg+xml,%3Csvg)
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Source: SuburbData\/DSRScore.<\/p>\n
SuburbData analyst Jeremy Sheppard said a key feature of these areas was that prices had grown outgrown neighbouring areas for many years, but buyer demand had recently dropped while housing supply had risen.<\/p>\n
\u201cOvervalued does not mean prices are expensive and undervalued does not mean they are cheap,\u201d Mr Sheppard said.<\/p>\n
\u201cIt\u2019s about what the market is willing to pay \u2026 there are a lot of parts of Sydney where the prices are not just high, they\u2019ve overshot the rest of the market.<\/p>\n
\u201cSuburbs don\u2019t outperform forever. They reach a point where buyers aren\u2019t prepared to pay the prices anymore because they have cheaper, comparable options nearby.<\/p>\n
\u201cThe risk is that if you buy in a market like this your home may sit there for a while without getting any return on your investment, or values may fall and you go into negative equity.\u201d<\/p>\n
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The data showed Sydney had a mix of overvalued and undervalued suburbs.<\/p>\n
Mr Sheppard said it was the opposite a range of pockets deemed \u201cundervalued\u201d: these areas had prices that were lower than underlying market metrics suggested they should be. <\/p>\n
These areas still had price growth potential despite the weakening market, he said.<\/p>\n
\u201cThere are still plenty of areas around Australia where you are better off parking your money in a property than letting it sit in a bank,\u201d he said.<\/p>\n
\u201cThese areas have simply become harder to find. During boom times, like in 2021, markets like that were easy to find. You throw a dart on a board and hit one. Now you need to know where to look.\u201d<\/p>\n
The research showed that many of Sydney\u2019s undervalued suburbs were scattered across Sydney\u2019s Blacktown region, Sutherland and parts of the inner west.<\/p>\n
They included Sutherland suburbs Oyster Bay, Caringbah, Caringbah South and Heathcote, along with The Ponds, Acacia Gardens, Woodcroft, Marayong and Schofields in the Blacktown region.<\/p>\n
SYDNEY\u2019S MOST OVERVALUED SUBURBS
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Source: SuburbData\/DSRScore<\/p>\n
Inner west suburbs deemed \u201cundervalued\u201d were Newtown and Drummoyne.<\/p>\n
Adrian Tsavalas, the director of inner west real estate group Adrian William, said home seekers could get better value in Newtown than they would have a year ago.<\/p>\n
\u201cConditions are really favourable for upgraders in the area,\u201d he said, noting that buyers who had been priced out of the popular suburb in previous areas were actually finding they had a window back in.<\/p>\n
\u201cThe market is down now, but markets can bounce back, sometimes with no warning. You can blink and miss it, these good opportunities don\u2019t always last,\u201d he said.<\/p>\n
REA Group economist Anne Flaherty said the current downturn was mostly fuelled by interest rate hikes, but the government\u2019s recent negative gearing and capital gains tax reforms had added an extra layer of uncertainty for buyers.<\/p>\n","protected":false},"excerpt":{"rendered":"Sydney\u2019s property slump is turning savage in some suburbs, with \u201covervalued\u201d prices now at risk of even steeper…\n","protected":false},"author":2,"featured_media":822367,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-822366","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/822366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=822366"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/822366\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/822367"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=822366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=822366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=822366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}