10 Best Sydney Suburbs for High Capital Growth

Are you looking for the best suburbs to invest in, in Sydney for 2023? The Sydney property market has been skyrocketing in the last few years. The median house prices in some areas of the Sydney housing market are reaching $2 million. With interest rates at a record low, there’s never a better time to purchase an investment property. Now, the interest rate rises after decisions by the Fed. So is this the last chance to invest for future growth?

Sydney property prices are expected to continue rising throughout the following year, although perhaps not as steep a price growth as we saw in 2021. We’re seeing a trend in investment shifting away from the many inner-city suburbs to more regional areas of Sydney. Let’s look at the top Sydney Suburbs to invest in for high capital growth.

Ashfield

Ashfield is located in the Inner West, located southwest of the Sydney CBD – about 8k away. Vastly accommodating low-rise apartments, detached houses, and a few grand Victorian buildings, Ashfield has a deep cultural history.

Everything you could possibly need is within twenty minutes of the Inner West suburb, including shops, education, recreational and sporting resources, and many jobs. It also has excellent public transport.

The median house price is $1,590,000, while units are an average of $710,000. Weekly rental income for houses is about $650 a week, and the rental yield is 2.1% per year. You can expect about $420 a week plus a rental yield of 3.1% for units in Ashfield, making it a strong prospect for a growing investment property in Sydney.

Balmain

Only 5km west from the Sydney CBD, Balmain is an affluent area with a vibrant culture. It’s an incredibly popular place to live. Balmain is home to a trendy restaurant scene, pubs, cafes, stores, bakeries, and other day-to-day services. The suburb features a mix of affluent Victorian buildings alongside restored sandstone workers’ cottages. It’s a pretty hilly area, so one storey houses are in short supply.

The median price of houses in Balmain has steadily increased over the last five years by a capital growth of 19.49%, more substantial than many other Sydney suburbs. The average property price is $2,306,000 for a house, while landlords bring in around $875 a week. Unit prices are similarly affluent at $1,220,000 to buy and $650 a week to rent.

It’s a suburb high in demand among buyers, guaranteeing that any property investment will result in high capital growth.

Bardwell Park

With the new Metro line opening up Bardwell Park for property investors and renters, property prices in this Sydney suburb are expected to soar. Bardwell Park has good parks, schools, and spacious houses, making it an ideal location to rent out to families.

In the last five years, Bardwell Park has experienced a growth of 36.04%, with the median house price now at $1,610,000. The average weekly rental cost is $600, with an annual yield of 2.4% for houses.

With the expected increased growth as a result of the new Metro line, Bardwell Park is currently in high demand, further pushing up property prices. Securing a house in this up-and-coming area would definitely be a substantial property investment for the future.

Bexley

Bexley is an exciting new investment prospect on the South West Sydney property market. Situated directly south of the CBD and close to the beaches in southern Sydney, it’s got the best of both worlds. Home to an ethnically diverse suburb consisting of nearly 20,000 residents, it’s a newly popular suburb for many.

Currently, real estate in Bexley is cheaper than other similar suburbs, meaning that it has a strong potential to grow. In fact, we can see its price growth in real-time, recording an increase of 32% over 2020.

The current median house price is currently $1,335,000, while units cost $710,000. Although the growth rate is expected to slow in the coming years, we can expect it to be a sound long term investment.

Rental prices for houses are around $640 per week while units are $400. The average annual rental yield is between 2.5-2.9%. More than 23% of the Bexley population are renters – making it an attractive option for property investors. It’s not too late to get your hands on a property within this beachside suburb.

Coogee

A gentrified coastal suburb located southeast of the CBD, Coogee is another suburb that is seeing rocketing house prices as light industrial developments and infrastructure projects unfold. The South-East Light Rail project is one such endeavour connecting Coogee to neighbouring Suburbs and making it an attractive residential suburb for renters and investors alike.

However, Coogee house prices aren’t low. The average house price is currently topping $3,601,000. Investors bring in an average of $1,300 a week in rent. Unit prices are around $1,392,500, with rental income averaging $650 a week. It’s a very high demand market, and prices have steadily increased over the last five years.

Many property investors in Coogee make their start by adopting a negative gearing strategy. With strong rental yield and high prices, negative gearing might be considered the best option to make long term gains as a buyer in Coogee.

Cronulla

Cronulla is located to the south of Sydney. It’s close proximity to the beaches while maintaining a spacious atmosphere. With locals naming it “God’s Country”, Cronulla is a popular destination suburb. It’s home to stunning ocean views, breathtaking scenery, and contemporary architecture.

Property prices are lower than in any other established residential area, such as in the Northern Beaches or Eastern Suburbs. Demand is not much higher than the average in New South Wales at the moment, making it relatively easy to secure home loans for properties here.

The current median property price in Cronulla is currently $2,350,000 for houses and $810,000 for units. The average rental yield is 1.9% for homes and 3.2%. Investors in Cronulla never lack for renters, making this one of the best suburbs to invest in New South Wales. Plus, Cronulla has seen a compound growth rate of 5.5% for houses and 2.9% for units over the last five years.

Fairlight

Located north of the CBD, just a step from Manly Beach, Fairlight is one of the gems of the Northern Beaches. With easy access to the CBD via the ferry but plenty of space, it’s a promising investment opportunity and guarantees rental potential. It’s located in the perfect area, far enough away to be affordable yet still higher than the average Sydney house prices.

In addition, Fairlight is one of the best suburbs to invest in Sydney for units – the five-year compound growth rate is an impressive 7.3% for units. Average house prices are $2,525,000 for houses, $1,463,000 for units. The rental yield is between 2.3-2.5%.

The Fairlight property market is very high in demand. Property prices are expected to increase in the coming years as it becomes a gentrified suburb.

Kensington

Kensington is 6km to the immediate southeast of the CBD in the City Of Randwick government area. Nearby is Moore Park and Randwick Racecourse. The suburb is also home to the University of New South Wales and the exclusive Australia Golf Club.

If you’re looking for very walkable suburbs, then Kensington offers easy access to Bondi and Coogee beaches while also a short journey away from the Inner West.

The median household income in Kensington is $1498 a week, above that of the Australian median household income. Real estate is expensive in the area; however, rental yields are well-positioned to increase as the area is home to students. Therefore, vacancy rates are rarely that high.

The average property price is higher than that of surrounding suburbs, costing $3,312,500 to buy a house or $970 to rent. Units cost significantly less to buy. The average price is around $942,500, with a rental income of $485 per week.

Maroubra

Maroubra is significantly more affordable than its neighbours in the Eastern Suburbs. Located 10km from the Sydney CBD, it’s an attractive prospect on the Sydney property market with many green spaces. With a stunning beach and excellent public transport, Maroubra is suitable for all residents and the largest suburb in the area.

The median house price in Maroubra is $2,300,000 for houses and $905,000 for units. Property investors can expect to receive $900 a week in rental income for houses with a rental yield of 2%. Units can expect to bring in $550 a week with an annual yield of 3.2%.

Narrabeen

Narrabeen has the ideal combination of high rental income, capital growth, and access to beaches. An excellent location for families and professionals, Narrabeen boasts a compound growth rate of 10.9% for houses and 8.0% for units in the last five years.

The average house price is $3,775,000, units are $1,217,500. Rental income for houses is especially affluent in Narrabeen, costing renters $1,100 a week. With high demand among buyers and continued property growth, it’s a substantial investment opportunity for those that can afford to get into this expensive property market.

Key Takeaways

Purchasing property for investment in any Sydney suburb location is likely always to pay off – property prices throughout New South Wales show a trend of solid growth. Plus, with the relaxation of international travel, vacancy rates are likely to plummet. Our top choices to decide on are strong and stable suburbs that offer excellent investment opportunities.

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FAQ

Which Suburb Is Best for Investment in NSW?

There are many excellent suburbs throughout NSW, offering strong investment potentials for your personal objectives. From Ashfield’s rich cultural heritage to Fairlights unbeatable location, our top suburb choice guarantees a sound investment, high rental yield, and capital growth.

Bexley, Maroubra, Kensington, Narrabeen, Balmain, Cronulla, Bardwell Park, and Coogee are among the best suburbs to invest in.

What Is the Fastest-Growing Suburb in Sydney?

Riverstone-Marsden Park is the fastest growing area in Sydney, in the suburb of Marsden Park. As one of the outer suburbs in the northwest of Sydney, it was identified as experiencing a growth rate of 23.2% between 2017-2018. Other fast-growing suburbs include Bexley, Bardwell Park, and Cronulla.

Where Should I Invest My Property in 2022 Australia?

The ten best suburbs to invest in Sydney in 2022 include Ashfield, Narrabeen, Bexley, Cronulla, Bardwell Park, Coogee, Kensington, Maroubra, and Fairlights. Property prices throughout Sydney are expected to continue rising in 2022 and beyond. Interest rates are currently at an all-time low in Australia, making this year an excellent time to stive after your personal objectives: begin investing in property.

Where Are First Home Buyers Buying in Sydney?

The trend shows that first-time buyers are purchasing properties from the inner west suburb Rhodes, beachside Maroubra, and inner-city Darlinghurst and Surry Hills, depending on their financial situation. These suburbs boast all the same amenities and excellent locations as their neighbours, but first-time buyers can purchase properties at significantly more affordable prices.

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