Sydney’s property market remains unpredictable, with some areas significantly overpriced while others are selling well below their true value. New analysis from SuburbData shows certain suburbs are overvalued by as much as $250,000 compared to similar nearby areas, while other locations are considered undervalued and could offer strong long-term growth potential.
The research looked at demand and supply, comparisons with neighbouring markets, and where each suburb sits in the property cycle. Analyst Jeremy Sheppard explains that overvalued suburbs risk price stagnation or even falls, while undervalued areas are more likely to see growth as market conditions shift.
The Most Overvalued Suburbs in Sydney
SuburbData identified several suburbs around Sydney’s outer fringe, particularly near the upcoming Western Sydney Airport, as the most overvalued:
Rossmore
Bringelly
Mulgoa
Orchard Hills
Ellis Lane
Here is the latest available data for key suburbs:
Bringelly
Median house price: $3,167,500 (based on 10 sales over the past 12 months)
Annual price change: –56%
Rental yield: 1.32%
Median rent: $800 per week
Mulgoa
Median house price: $2,800,000 (based on 14 sales in the past year)
Annual price change: +111%
Median rent: $780 per week
Rental yield: 2.25%
These figures highlight just how volatile prices can be in Sydney’s fringe suburbs, especially where new infrastructure projects are driving speculative growth.
Where Buyers Can Still Find Value
For those looking to buy in areas with better long-term potential, SuburbData has highlighted several undervalued suburbs, mostly located 15 to 30 kilometres from the CBD:
North Balgowlah
Kareela
Willoughby
Lane Cove
Normanhurst
These suburbs combine lifestyle appeal with comparatively lower prices when compared to similar nearby locations. While current median price data for these areas is limited, their undervaluation suggests better potential for future capital growth.
Sydney’s Market Trends
Sydney’s housing market remains divided:
In 2024, homeowners in parts of the southwest, northwest, Greater Parramatta, and coastal areas gained more than $200,000 in equity on average.
At the same time, over 6,300 properties have remained unsold for more than 180 days, making up 18% of all current listings. This represents a 30% increase year on year and indicates rising “stale stock” as buyers grow more cautious.
Key Takeaways
Sydney’s property market is far from uniform. Outer-fringe suburbs like Bringelly and Mulgoa are currently priced well above comparable nearby areas, while undervalued suburbs such as Lane Cove and Willoughby may represent better long-term opportunities.
For buyers and investors, the safest approach is to compare prices across neighbouring suburbs rather than focusing on one postcode. Understanding where a suburb sits in the broader market cycle can help avoid overpaying and identify future growth hotspots.
