The sought-after Sydney suburbs where house values just shot up

Sydney’s eastern suburbs property market is roaring back to life as demand rises for the northern part of the region, lifting house values by 3.4 per cent in the past month alone after cuts to interest rates.

The month’s jump in values – the biggest in all of Greater Sydney – was led by Bellevue Hill, where values soared 8.1 per cent to a new house median of almost $12 million, followed by Bondi Beach, where the median shot up 7.2 per cent to $4.8 million, and nearby Waverley, up 6.7 per cent at $4.2 million.

Eliza Owens, head of research at Cotality Australia, said massive gains in that northern area – which stretches south to Bronte and west to Paddington, Edgecliff and Darling Point – were a direct result of the three interest rate cuts this year, and the cuts still expected.

“The reason we’re now seeing those high-end markets come back into the mix is that interest-rate declines increase borrowing power disproportionately for middle- and high-income households,” she said.

“By dollar value, you can get access to more money, and so people try to buy further in and target the more expensive markets. But, if anything, we haven’t seen the high end pick up as quickly as we might have expected because of the added layer of uncertainty caused by the tariff turmoil and the geopolitical risks holding some back.”

That same influence was seen in the inner west, where values in the Strathfield, Burwood and Ashfield region rose 3.1 per cent over the month, bolstered by many new unit developments in anticipation of the Metro West, which has made houses even more desirable.

Until now, the property market had been transfixed by price rises in more affordable areas, such as Sydney’s south-west and west, where buyers, particularly first home buyers and investors, were wrestling for bargains.

Over the past three months, on Cotality figures, the Canterbury region was the biggest mover, with prices rising 6 per cent to a median of $1.75 million, compared with a three-month 4.9 per cent increase in the northern part of the eastern suburbs and a 4.2 per cent rise in the inner west.

Buyer’s agent Chris Curtis of Curtis Associates said buyers in the top end of the market were also sensitive to the sharemarket mood, and the latest Bank of America global fund manager survey had found a record 58 per cent believed equities were overvalued. As a result, many are looking to put their money in property, further encouraged by the lower interest rate cycle.

“But there are low volumes of stock on the market in those top-end areas, and we have a lot of IT entrepreneurs who are making huge returns at the moment with AI and have massive budgets,” Curtis said. “They’re as rich as Croesus, and they’re aggressive buyers fighting with each other, which pushes up prices. They’ll whack on an extra half a million to clinch the sale.

“In addition, those areas [in the eastern suburbs’ north] are escaping a lot of the rezoning programs, so people want to avoid the proliferation of duplexes and know that will keep their houses unique and valuable.”

Ric Serrao, selling principal of Raine & Horne Double Bay, said some of those who had benefited most from the rezoning, grouping together with neighbours to sell their homes to developers, were now also looking for houses in the northern end of the eastern suburbs.

“What I’ve found in Bellevue Hill is that there’s very, very high demand for houses and the prices are in Monopoly money now, to be fair,” Serrao said. “Since the last rate drop, and then seeing the sun come out, demand has risen. In addition, stock levels have been on the light side, so prices have risen.”

He is also fielding demand from offshore money, which he attributes to Australia being seen as a safe country.

Eastern suburbs PPD Real Estate agent Vince Licata said he was also seeing an increase in interest from buyers in that high-priced area. “We’ve definitely seen an uptick in inquiry, and the number of buyers looking – and pricing has gone up a bit as a result,” he said.

“The interest rate cuts are one reason, and we’re also seeing the general perception that the worst of the market is now over and it’s a good time to buy, so there’s a better vibe. Most activity is along the beaches, and we have high numbers inspecting, becoming registered bidders and bidding, and a lot of results exceed expectations.”