New South Wales and Sydney have witnessed the greatest impact amid the property market slowdown. Will there be any standouts in the state and the capital city next year?

Upside Realty director James Kirkland said the movement of interest rates will likely have a big factor in what happens in Sydney.

“I think as long as we’ve got less stock in the Sydney market, we’ll continue to see the market normalise in 2023,” he told Your Investment Property.

“However, we could potentially see some more stock coming back onto the market next year with the deadlines for fixed interest rates finishing which may put pressure on those who’ve overextended themselves.”

When investing in Sydney, the important consideration is picking areas that are close to transport hubs and the new Western Sydney airport.

“Consider schools and research which ones have good names. We’re seeing higher potential returns in those areas,” Mr Kirkland said.

Which suburbs to watch out for in 2023

Your Investment Property reached out to Mr Kirkland and Joust CEO Carl Hammerschmidt to get their insights about which suburbs should investors consider in 2023. The following are their picks:

James Kirkland’s suburb picks for 2023:

1. Blacktown

Considered one of the most multicultural places within Greater Sydney, Blacktown is one of the most viable places to invest in next year, especially due to its proximity to Parramatta, where a lot of people are working.

2. Penrith

Penrith is another one to watch as the CBD is expanding at a rapid rate and it’s quite close to the new airport that’s coming.

3. Colyton and St. Clair

Colyton and St. Clair are suburbs close to Sydney, both of which have larger blocks.

4. Baulkham Hills and Seven

Baulkham Hills and Seven’s proximity to the M2 Hills Motorway present an opportunity for potential property investors.

Carl Hammerschmidt’s suburb picks for 2023:

1. Bellevue Hill

Located just minutes from the city as well as Bondi Beach, Bellevue Hill has seen a rental yield of 1.8% for houses and 3.0% for apartments.

On top of this, Bellevue Hill has seen a compound growth rate of 8.8% for houses and 12.0% for units based on the last five years.

2. Cammeray

Situated in Sydney’s North, the suburb has seen a rental yield of 2.1% for houses and 2.8% for apartments over the past year.

Over the past five years, the suburb has had a compound growth rate of 3.8% for houses and 17.8% for units.

3. Taree

Taree has witnessed a substantial compound growth rate of 20.5% for houses and 21.4% for units over the past five years.

Last year, it achieved a rental yield of 4.7% for houses and 5.1% for apartments.

4. Kurrajong

Nestled in the Blue Mountains, Kurrajong has recorded rental yields of 2.4% for houses and 3.2% for units.

Over the past five years, the compound growth rate in Kurrajong reached 34.4% for houses.

Your Investment Property’s Suburbs to Watch 2023 series:


Photo by Tourism Australia on Canva.