Best Sydney Suburbs for Unit Investment Revealed

Detached house prices have increased to new highs across many Sydney blue-chip suburbs, while unit prices have lagged behind.

With low interest rates and households carrying record levels of debt, latest CoreLogic figures show Sydney's total value of the dwelling market is 2.6 per cent higher than the previous peak.

Buyer’s Domain founder Nick Viner said figures showed a widening price gap between apartments and houses in some inner Sydney suburbs.

Based on realestate.com.au data and PropTrac figures, Viner said there were five Sydney blue-chip suburbs that showed notable price disparity between housing and unit median growth.

“As demand for housing in these suburbs increases, unit prices will be dragged up dramatically to reach historically normal levels of relativity,” he said.

“Investors looking to make solid capital gains are certain to be snapping up units in these areas.”

Units v houses: Five hot Sydney suburbs

Marrickville

Marrickville’s median detached dwelling price was $1.3 million in December 2018. Figures show it had increased to $1.43 million by the end of last year.

Comparatively, Viner said, the movement in median unit prices in two years was $35,000 to $747,000 by December last year.

“That’s quite a gap between houses and units,” he said

“Marrickville in Sydney’s Inner West is one suburb where a recent and rapid rise in house prices will drive would-be buyers toward apartments.”

Leichhardt

Just 5km west of the CBD, Leichhardt has a current median house price of $1.51 million, much higher than the median unit price of $1 million.

“It’s been quite a sharp increase for detached values too—about $160,000 in two years—in stark contrast to units, which rose just $40,000,” Viner said.

“But, in the three months since December, median unit prices have actually surged another $30,000, giving weight to my theory that pent-up price growth in the Leichhardt apartment market is just coming to fruition.”

Randwick

Randwick’s median house price is around $2.55 million, while the suburb’s current unit median price around $945,000.

Viner says house price growth has been consistent during the past two years, while the unit market has remained “mostly steady”.

Surry Hills

Surry Hills, Viner said, is primed to benefit as people return to inner Sydney after Covid.

“I believe investors and young professionals will lead the charge to Surry Hills,” he said.

Surry Hill's median unit price sits under the $1 million mark, at $920,000, while the median house price is $1.8 million.

Neutral Bay

This harbourside suburb on the lower North Shore with a $2-million-plus price tag for houses rounds out the list.

Neutral Bay's median unit price sits at $1.03 million

“For house buyers locked out by price, the reasonable alternative is a more affordable two-bedroom unit,” Viner said.

Recent Corelogic data show Sydney's median house price sits at $1.1 million, while the median apartment price in Sydney is $755,000.

Across the nation, dwelling prices grew by 2.8 per cent in March. CoreLogic figures show this reflected the fastest monthly result in 32 years.