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Key points

• Ajay Gulani bought in North Kellyville this year, but had to raise his budget to be able to upgrade.
• Sydney’s more affordable suburbs have recorded some of the biggest price growth over the year, new Domain data shows.
• The biggest jump in house prices was in Catherine Field where they flew by 23.9 per cent.

Property listings

Ajay Gulani was watching interest rates rise with the hope it would mean house prices across Sydney suburbs would fall.

The IT business owner was especially interested in North Kellyville, where he had been looking to upgrade with his family from a four-bedroom single-storey home to a five-bedroom double-storey place.

Ajay Gulani bid at several auctions before finding a home for his family.Credit: Rhett Wyman

But prices remained high, and it took another eight months of inspecting properties, bidding at auctions and an increase in their budget before Gulani and his family could buy.

“You do expect that when interest rates go up that property prices stay where they are, at least, or go down even,” Gulani, 47, said. “But that wasn’t happening – there were record-breaking sales in North Kellyville – we didn’t see any sign of that.

“Basically, we came to the point where we were sick of looking at houses every weekend. We did have to increase our budget a bit – by about $70,000 to $80,000,” he said.

North Kellyville was one of the top 20 Sydney suburbs for house price growth over the year to September, up 7.6 per cent to a median of $1,705,000 in Domain’s latest House Price Report.

The biggest jumps were in a mix of affordable and pricey suburbs, including Catherine Field in the south-west, where the median rose 23.9 per cent to $1,025,000, and sought-after Bellevue Hill, where properties rose 13.2 per cent to $8.6 million. The top three spots were rounded out by Sutherland, in the south, which was up 12.9 per cent at $1,277,500.

For units, Point Frederick on the Central Coast rose 30.8 per cent to $870,000, Milsons Point was up 20.7 per cent at $2.45 million and Darling Point rose 13.3 per cent to $2.9 million.

It came as Sydney’s median house price shrugged off last year’s downturn and rose a further 2.1 per cent in the September quarter to $1,578,099. Experts now predict house prices will fully recover from the recent downturn by year’s end, despite a slowdown in the pace of price growth.

Domain chief of research and economics Dr Nicola Powell said Sydney’s more affordable pockets had recorded some of the strongest house price growth.

“Many of those areas out west and south-west, they’re more affordable areas where they probably didn’t see a bigger swing in price during the downturn,” she said.

But some suburbs were lower in price over the past year than the previous year, including Gymea, where house prices fell 21.5 per cent, and Rushcutters Bay, where unit prices fell 32 per cent.

Powell said the rate of decline was starting to ease in suburbs that had fallen.

This year’s spurt of house price growth has started to lose some steam, experts say, though prices would not plummet to the lows of December last year.

AMP chief economist Dr Shane Oliver said the recent rise in inflation in the September quarter, to 1.2 per cent, raised the risk of another interest rate rise in November.

House prices would not be immediately affected by another push in interest rates, Oliver said, but their growth could ease by the new year.

“The risk is still high of another leg down [house price fall],” Oliver said. “The full impact of interest rate rises hasn’t been felt yet, and if there are more it just means there will be more uncertainty hanging over the market.”

BresicWhitney chief executive Thomas McGlynn said that while prices in some suburbs were rising, Sydney’s wider market was already showing signs of slowing.

Fewer people were turning up at house inspections, and the number of days that properties were on the market before selling was rising, as a rise in listings over spring gave buyers more choice.

“It has been a sellers’ market for the large majority of the year, and now it’s not quite a buyer’s market, but it is definitely more balanced,” McGlynn said. “I think we will see a slowdown in price growth between now and the end of the year.

“We’ll see fairer results, not the runaway auction results we saw earlier in the year.”

In North Kellyville, Ajay Gulani’s agent, The Studio Estates director Ismail Ates, said prices were recovering.

“The buyers who are transacting right now, they’ve also got something to sell because they have made so much profit on their property or have so much equity; it doesn’t change their position in the market,” he said.

“The ones who are hit hardest are first home buyers. I really don’t know how they’re going to get in.”

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