Sydney home prices have become so disheartening that Harbour City residents are increasingly moving to Melbourne, the metropolis they love to disparage as cold, wet and drab Bleak City.
With Melbourne set to overtake Sydney as the country’s largest city later this decade, new research has revealed a rising number of the new residents swelling up the city are former Sydneysiders.
Many were making the move for the cheaper cost of living, with Melbourne property prices an average of nearly $190,000 lower than in Sydney.
Other Sydneysiders were opting for Melbourne investment properties rather than purchasing a home for their own needs within Sydney.
Buyer’s agent Cate Bakos said Sydneysiders liked the better value for money in Melbourne.
The data from PropTrack showed the inner Melbourne suburb of Richmond was the most popular interstate market for NSW buyers searching property deals on Realestate.com.au.
The Melbourne CBD and inner suburbs Brunswick and South Yarra were other markets attracting high numbers of searches from NSW-based property seekers, who were a mix of owner occupiers making a move and investors wanting a rental.
There was no corresponding high level of interest from Melbourne-based buyers into Sydney real estate.
The Harbour City was also one of the least popular capital city markets for buyers based in other states.
Real estate inquiries from other states into NSW dropped by 32 per cent over the past year, the biggest fall of any state.
Author Amanda Hampson moved from Avalon to inner Melbourne. Picture: Adam Yip
According to data from moving service Muval, Sydney is the key driver of Melbourne’s growth. Sydneysiders accounted for the majority recent moves into Melbourne, with the outflow increasing 27 per cent between 2020 and 2022. The bulk of those making the move were aged 25-34.
Demographers said Melbourne’s rise in popularity with Sydneysiders wasn’t only because of the cost of living – there was a perception of better traffic and town planning.
Dissatisfaction with Sydney home prices was also pushing residents to the Gold Coast, with the PropTrack data showing suburbs Burleigh Heads, Surfers Paradise and Broadbeach were popular choices – primarily for investors.
Adelaide, one of the few markets where property prices have continued to rise during recent interest rate hikes, has also proved a popular market for Sydney-based investors.
This Brunswick house recently sold for $905,000. A similar house in an equivalent suburb in Sydney like Newtown would sell for about $1.5m.
Cate Bakos, a Melbourne-based buyer’s agent and president of the Real Estate Buyer’s Agents Association of Australia, said projections showing Melbourne will overtake Sydney as the country’s biggest city prompted many Sydney residents to invest or relocate.
“There’s an awareness that there is more infrastructure coming and Melbourne is attracting more people. The lifestyle and chance for capital growth is a big attraction,” she said.
Sydney buyers – both investors and those relocating – usually gravitated to inner suburbs of Melbourne because they could not afford the equivalent suburb in Sydney, Ms Bakos said.
“Sydney buyers like the areas they know. Richmond is very popular as it’s near the MCG,” she said.
“Generally (Sydneysiders) will go for houses because the value proposition is so much better. You can buy a larger house closer to the CBD for less money than a smaller Sydney house that’s much further out.”
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