Green Is Good: Prices Higher in Sydney’s Leafy Suburbs

Sometimes the grass is, in fact, greener.

The value of parks, trees and backyards is bolstering property prices in a number of “green suburbs” in Sydney according to data from Corelogic.

It comes as the post-COVID-19 world shifts towards a renewed focus on healthy, urban living with many cities nationally increasing parkland, cycle lanes and more.

Greenspace refers to public or private land that is completely or partly covered with grass, trees, shrubs or other vegetation. In Sydney, that looks like parks, community gardens, cemeteries, school yards, playground and vacant lots.

New findings from Corelogic suggest that there has been a direct increase in housing value premiums in suburbs across Sydney where the average of green or open space is higher.

Highest proportion of public greenspace

	Average house sale price 2019	Average unit sale price 2019	Average % public greenspace
Heathcote – Waterfall	$912,937	$622,500	80.50%
Berowra – Brooklyn – Cowan	$1,007,297	$738,500	78.10%
Terrey Hills – Duffys Forest	$2,185,206	$585,000	75.00%
Asquith – mount Colah	$1,065,767	$660,995	66.30%
Menai – Lucas Heights – Woronora	$998,368	$738,072	64.10%
Bayview – Elanora Heights	$1,871,173	$1,718,333	57.80%
Woronora Heights	$1,095,702	$976,250	57.40%
Turramurra	$1,924,818	$993,229	57.00%
Helensburgh	$941,500	$726,368	56.20%
Manly Vale – Allamie Heights	$1,795,322	$722,182	52.70%

^Source: Corelogic

“Our case study has revealed a positive correlation between housing values and greenspace,” Corelogic head of research Tim Lawless said.

“As Australia’s climate change strategies and domestic policy evolve over the years ahead, the market’s readiness to value ‘greenness’ as a tangible property feature may strengthen.”

“In areas where greenspace was scarce, such as the Eastern Suburbs and Inner City, private greenspace had a far stronger relationship with price,” Lawless added.

However, when compared to European cities, the correlation between greenspace and housing prices was low due to Sydney’s larger volume of greenspace.

For example, Sydney currently has 46% public greenspace while Amsterdam has 13% and London 33%.

Ray White’s chief economist, Nerida Conisbee says property price growth will continue next year and mortgage holders will need to “survive until 2025” amid expectations of higher interest rates for longer.

Ms Conisbee said strong population growth and a housing supply shortage combatted the impact of rising interest rates in 2023, leading to unusually strong price growth during a rate hiking cycle. The latest CoreLogic data shows home values have increased by more than 10 percent in the year to date in Sydney, Brisbane and Perth. Among the regional markets, price growth has been strongest in regional South Australia with 8.6 percent growth and regional Queensland at 6.9 percent growth.

“As interest rates head close to peak, it is expected that price growth will continue. At this point, housing supply remains extremely low and many people that would be new home buyers are being pushed into the established market,” Ms Conisbee said. “Big jumps in rents are pushing more first home buyers into the market and population growth is continuing to be strong.”

Ms Conisbee said interest rates will be higher for longer due to sticky inflation. “… we are unlikely to see a rate cut until late 2024 or early 2025. This means mortgage holders need to survive until 2025, paying far more on their home loans than they did two years ago.”

Buyers in coastal areas currently have a window of opportunity to take advantage of softer prices, Ms Conisbee said. “Look out for beach house bargains over summer but you need to move quick. In many beachside holiday destinations, we saw a sharp rise in properties for sale and a corresponding fall in prices. This was driven by many pandemic driven holiday home purchases coming back on to the market.”

3 key housing market trends for 2024

Here are three of Ms Conisbee’s predictions for the key housing market trends of 2024.

Luxury apartment market to soar

Ms Conisbee said the types of apartments being built have changed dramatically amid more people choosing to live in apartments longer-term and Australia’s ageing population downsizing. “Demand is increasing for much larger, higher quality, more expensive developments. This has resulted in the most expensive apartments in Australia seeing price increases more than double those of an average priced apartment. This year, fewer apartments being built, growing population and a desire to live in some of Australia’s most sought-after inner urban areas will lead to a boom in luxury apartment demand.”

Homes to become even greener

The rising costs of energy and the health impacts of heat are two new factors driving interest in green homes, Ms Conisbee said. “Having a greener home utilising solar and batteries makes it cheaper to run air conditioning, heaters and pool pumps. We are heading into a particularly hot summer and having homes that are difficult to cool down makes them far more dangerous for the elderly and very young.”

More people living alone

For some time now, long-term social changes such as delayed marriage and an ageing population have led to more people living alone. However, Ms Conisbee points out that the pandemic also showed that many people prefer to live alone for lifestyle reasons. “Shorter term, the pandemic has shown that given the chance, many people prefer to live alone with a record increase in single-person households during the time. This trend may influence housing preferences, with a potential rise in demand for smaller dwellings and properties catering to individuals rather than traditional family units.”