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2021 Investment Property Review: Where are the Best Suburbs in Sydney?


The interest in investment properties across Sydney’s suburbs seems to grow every year; 2021 is no different. As Australia’s most populous city, it’s unsurprising that there is a steady demand for residential and commercial properties across the city. While on the surface it may seem that investment properties in sydney are easy to come across, the profitability and demand for commercial/residential properties differ among suburbs. This is not to diminish the consistency and strength of the Sydney property market, however, property investors should know what the best suburbs in Sydney to invest in are.

Why should property investors take notice of the best suburbs to invest in Sydney in 2021?

At Cite Group, we consistently keep an eye on best suburbs to invest in Sydney, however, 2021, is of particular interest. Though this article is primarily focused on suburbs within Sydney, factors occurring at the national level have, predictably, impacted the city. 

According to Reuters, here’s why Australia’s economic growth in 2021 is projected to be extremely strong:

  • Successful defence against the pandemic;
  • Slow contraction of the economy in 2021;
  • Earlier reopening of the economy due to successful defence against the pandemic;
  • Recovery of all 878,000 jobs lost during the lockdown; and
  • Slashed cash rate by the Reserve Bank Australia (RBA) leading to low interest rates (implemented as an economic stimulant by the RBA).

The above factors also lay the foundation for a strong property market. As the economy grows strong, more people become employed and more businesses start/expand; this coupled with stimulants such as the reduced cash rate, make it easier for people and businesses to purchase/rent both commercial and residential properties.

As mentioned previously, the pandemic was a significant hurdle for many Sydneysiders, however, many potential buyers have been roped back in through low interest rates (caused by the RBA’s reduction in the cash rate), government tax cuts, JobKeeper (prevented a massive loss of income and savings, allowing for quicker personal economic recovery) and more. 

Now that we’ve solidified the country and state’s comeback, let’s now take a look at investment on a micro-level. Sydney is a large, complex city with suburbs that aren’t all developed equally. So, which of Sydney’s suburbs are best for investment?

5 best suburbs in Sydney for property investment in 2021

Suburb Why?
  • 42% renting population – indicating a demand for residential properties
  • It benefits from the regional shift caused by the pandemic which saw buyers/renters move away from the city as work from home directives were implemented.
  • High median rent – $920 per week (approximately $500 above the national average)
Bardwell Park
  • This suburb is in close proximity to WestConnex, a 33-kilometre predominantly underground motorway scheme, which will improve the suburb’s connectivity.
  • The suburb is a short train ride away from Central Station while also having excellent access to the Inner-West and Eastern suburbs.
  • There was a 22% median price change per year, indicating increasing high profits for investors.
  • This suburb saw massive growth in 2020 despite the pandemic and expects to see even more in 2021. 
Manly Vale
  • Benefits from the ‘bridesmaid effect’ as the sister suburb of Manly. This means that Manly Vale is next in line for exponential growth by benefitting from rippled capital growth from Manly.
  • According to the Australian Bureau of Statistics, the majority of people 18 or older are working full time. A steady source of income indicates a population with the potential to create both rental and buying demand.
  • Manly Vale has become more accessible to the CBD.

Learn about Cite Group’s development in Manly Vale, QUBE.

  • Rental demand temporarily moved to suburbs outside of the inner-city and the inner-west because of the rise in remote working (due to the pandemic). However, Petersham remains a solid long-term investment option because investors foresee the demand returning to this area as the effects of the pandemic drastically reduce in Australia.
  • 42.22% rental population (according to Real Estate Investar), indicating a large demand.
  • This suburb demonstrated great resilience in the face of the pandemic by having its median house prices rise by 27%.
  • There are many spacious houses available for property investors to purchase, upgrade and resell/rent.
  • There is excellent access to the CBD, Inner West and Eastern suburbs.
  • 23.67% of the occupants in this suburb are renters – giving the suburb a solid base of renters for a steady rental demand.
  • This suburb also showed great resilience against the COVID-19 pandemic as its median house price rose by 32%.

Based on our analysis of these suburbs, property investors should note a few things for 2021. First, renters and buyers are moving away from units and throwing their demand behind houses in the majority of our mentioned suburbs. Second, inner-city and inner-west suburbs are less in demand this year than those further away from Sydney because of the pandemic which saw a rise in remote working.

While there is little doubt that the demand for suburbs close to the city will return, for now, property investors can benefit from purchasing and developing properties in the above-mentioned suburbs.

To learn about property development and for further property market analysis, visit our website.