What determines property prices in Sydney

Houses and townhouses

What defines property prices? This is a question that we all ask at some stage of our property investing journey. Property prices are driven by a wide range of variables. However, we think some of the aspects of the property are more important than others. So what determines the property value in Sydney?

We think in Sydney the key factor for property value is location. Desirable suburbs are in high demand, often regardless of the timing of the property cycle. Close proximity to amenities, high quality schools and the job nodes pays important part in Sydney property prices. Take a look at areas like Paddington, Surry Hills and Redfern.

These areas could be perceived as average. Yet they are in high demand. Paddington has an added bonus, that Victorian feel.

Also proximity to transport nodes is important. Redfern is an excellent example, with Redfern station being a major hub with trains running in every direction of Sydney train network. Paddington is close to Bondi Junction.

Water views are also important in Sydney. In fact, we will stretch it as far as to say that any views would play a role in property value. Areas with access to Harbour views, Sydney bridge views or bush views are in demand, and add that special and unique characteristic to the property.


When it comes to units the same broad metrics hold. Unit values in Sydney are defined by variables including the view, location, access to great transport and school zones. However, unit market is more sensitive and more prone to oversupply. This is why we are also adding another variable and that is the type and quality of the unit complex. No high rises, small walk up blocks are our pick when it comes to defining apartment values in Sydney.

The market in Sydney inner city is dominated by owner-occupiers. However, we think that apartment market is dominated by investors, especially with the recent build-up of apartments.  Investors tend to like properties that are on smaller parcels of land. These properties tend to generate better yields.

As a rule of thumb, investors like to buy into low maintenance, higher yield properties. This means that “resort living” apartment blocks are not usually attractive to the investor segment.

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