Sydney is now home to almost 5 million people and the NSW government anticipates the state's population will grow to 9 million by 2031, with much of that increase undoubtedly occurring in Sydney, the nation’s biggest city.

As a result, homes within 25 kilometres of the CBD will continue to see escalating prices in all likelihood. This could mean beyond that point, there may be some reprieve from the property rat race. And for our purposes here, better value for money.

For example, a prospective buyer might consider the Hornsby Shire on the upper north shore, Pittwater on the northern beaches, the Sutherland Shire down south, or the far west and south-west, between Penrith and Campbelltown.

Northern beaches

The median price on three bedroom houses in Mona Vale, for instance, is $1.3m, as per Domain Group, which represents very good value for Sydney, especially close to the beachfront.

Similarly, in nearby Newport, a three bedroom house goes for just $1.4m, says Domain Group. Demographic data (REA Group) about the Pittwater area suggests there is a large number of older residents and retirees, and typically these people are also downsizers, looking for units more so than houses.

Three bedroom units there have a median auction price of $958,000, says Domain Group, which is a rather attractive price for property with the potential for a waterfront view.

Real estate agent Kerrie Patterson of Patterson Morton in Mona Vale, says she mostly sees interest from semi-retirees and retirees, as well as young families.

“They feel like they want the house with the big back yard and the community, or the beach nearby,” says Patterson.

Patterson says some new buyers work in the area and some are happy to commute into town. Others will work part time, or at home and go into the city the other days, trading off the extra travel for lifestyle.

Western suburbs

Over in the west, Parramatta continues to lure new buyers. While it’s only 23 kilometres from the CBD and really is still in the thick of Sydney’s activity, it's a little off the main drag and worth considering, especially for those who work close by.

For example, a three bedroom house in Parramatta is currently selling for a median price of $972,500, says REA Group, which is well below the median in suburbs only slightly closer to the CBD. The local government is also injecting $8bn into the Parramatta CBD, which, it’s expected, will see it become a major hub for the Sydney economy. Locals might suggest it’s already headed that way given the growth of local business and increase to the immediate population.

To escape the rat race more thoroughly, however, buyers might set their sights further west. The chief reason being its relative level of affordability, with a three bedroom house in Penrith selling for around $565,000, as per Domain Group, which is virtually unheard of across Sydney. Units are similarly cheap, with a two bedroom going for about $367,000, says Domain Group.

The western suburbs have also been a focus of the Turnball government, which has been pushing for new transport infrastructure between Penrith and Sydney Airport, as well as for the ongoing revamp of the Penrith town centre.

"What we have noticed is that Penrith and Parramatta have come up as CBDs,” says Felix Taing, from buyer’s agency Cohen Handler. “So people are relocating to those areas and hubs and also a better lifestyle, not having to commute to the city for an hour and half each way.

"So they’re compromising in going further west but they’re getting a bigger block of land and access to good schools, as well as good job prospects.”

South-west

Taing has also seen increasing buyer focus in the south west, in suburbs like Oran Park and Narellan. Across the entire Macarthur region, in fact, there’s a high level of development, with new housing and retail areas popping up in several of its suburbs.

"A lot of young families are moving out there because you can buy a brand new house on about 450 square metres for about $650,000 and that’s a really good price for a lot of people starting out,” says Taing.

Specifically, four bedroom houses in Narellan are selling for around $630,000, as per Domain Group. This level of affordability, together with improved accessibility via train and bus links, is helping to attract plenty of prospective buyers.

Taing says there’s a strong sense of community developing around the area, too, with people meeting up at local cafes and shops.

"I see a lot of families move there,” he says. “The south west is getting a big revamp."

Upper north shore

Meanwhile, in Hornsby on the upper north shore, interest has been limited to those in the local area, according to a few local real estate agents.

For example, Craig Barry from Elders in Hornsby, says he's not really seeing an influx of new residents but mainly people who live in the area and want to stay local. In this regard, it's a rather tightly held suburb.

Still, auctions are busy in Hornsby, typically hitting clearance rates above 90%, as per CoreLogic RP Data. It’s easy to see why: it's a leafy suburb with large homes and very well located at the edge of Sydney’s north shore. A three bedroom house there sells for $980,000, says Domain Group.

Numbers of units are also rising in the area and have been particularly of interest due to their convenience near the rail line and local shops. A three bedroom unit, for example, goes for about $775,000, says Domain Group.

Agent Nick Addison, from LJ Hooker in Hornsby, says buyers in the area are mostly interested in being close to transport, shopping centres and schools. He says there’s a good mix of people as well, typically families or couples, and perhaps fewer younger buyers given the higher price point.

Down south

Amid surging interest in the area's real estate, the Sutherland Shire has also just enjoyed its first ever rugby league premiership. This should only raise the Shire's profile further - not that it needs it. Cronulla property isn’t all that affordable, with many of its beautiful beachside homes selling between $1.5m-$1.9m, based on recent sales reported by Domain Group.

But in neighbouring suburbs like Caringbah and Miranda, prices offer noticeably better value and are equally close to local beaches and parks. For example, a three bedroom house in Caringbah costs $1.1m, as per REA Group. Meanwhile in Miranda, it’s just $1.2m for a three or four bedroom house.

David Newton of Newton Real Estate in Caringbah, says affordability is a priority among the buyers he sees.

"We are one of the most affordable beachside areas in Sydney," says Newton. "So we’re getting a lot of younger people from the eastern suburbs and north shore, gravitating this way because of affordability.

"Back that up with accessibility. You can catch the train from Cronulla beach literally, all the way into the CBD or airport, or wherever you need to go. And we don’t generally have the gridlock of traffic that they have on the northern beaches."

Newton says that the Sutherland Shire is very similar to the northern beaches because it not only boasts beaches but a beautiful waterway in Port Hacking, which is a smaller version of Pittwater but still very clean and pristine and surrounded on one side by the national park, he says.

"So, I think they’re coming down primarily for affordability but also accessibility, community and lifestyle," says Newton.

He says that realistically you can still get a nice house for under $1.5m and a nice unit for less than half of that. All up, it seems there’s relatively good value to be found in the Shire, too.

By JP Pelosi

See also:

Northern Beaches beauty

Sydney fourth on UBS Housing Bubble Index

Sydney, Melbourne auctions still running hot