A new study has examined what people in Sydney look for when buying property, whether it’s a home to live in or a place to invest. The findings reveal that the reasons buyers choose certain types of homes in specific areas can vary significantly depending on whether purchasing for personal use or investment purposes.
C-EDGE researchers joined their UniSA Business researchers to survey Sydneysiders and understand what influences buyers’ purchases, including property type, location, age of the buyers, and price.
The study identified three distinct buyer groups that are shaping the Sydney housing market
- CBD settlers,
- Suburban settlers, and
- Exurban (outer suburbs) settlers
Drawing on a 2018 survey of 533 households across Greater Sydney, researchers investigated people’s preferences when buying a home to live in versus an investment property, along with their favoured suburb types and key housing features.
The results found that CBD dwellers are more likely to gravitate toward apartments—especially for investment—while suburban and exurban residents tend to remain loyal to detached houses for both living and investing.
Suburban households were particularly willing to pay more for larger homes, reflecting a strong preference for family comfort and long-term lifestyle aspirations. Meanwhile, buyers in the outer suburbs struck a finer balance between affordability and practicality, favouring modestly sized homes that meet their needs.
Suburban settlers also strongly preferred four-bedroom homes in peaceful or coastal neighbourhoods close to parks and schools, compared to townhouses or apartments.
A consistent trend across all buyer types was a preference for Anglo-Australian neighbourhoods over culturally diverse ones. Suburban settlers, in particular, were most inclined to live in suburbs with predominantly white Australian residents—reflecting deeper cultural and social influences on housing choices.
What else stood out?
The research also revealed key differences in how buyer groups prioritise financial returns.
- CBD investors focused on long-term capital growth, preferring properties that would increase in value over time.
- Suburban and exurban investors, on the other hand, were more interested in strong rental income, showing a more income-driven approach to property investment.
The three buyer segments shaping the real estate market
Young, urban, and investment-savvy
Young CBD dwellers are driving urban property trends, prioritising proximity to the city, public transport and vibrant neighbourhoods. This predominantly male, younger demographic favours two- to three-bedroom properties with secure garages while avoiding older buildings and high mortgage costs. On the investment front, they focus on high rental returns in family-friendly or exciting neighbourhoods, reflecting a preference for lifestyle-driven practicality and future growth potential.
Affluent families driving suburban demand
Affluent families – typically middle-aged couples with children – are reshaping suburban housing markets. They prioritise spacious four-bedroom homes in low-density neighbourhoods near parks and schools, balancing safety and lot size for their personal residences. As investors, they target capital growth in coastal or peaceful urban locations, demonstrating a long-term, growth-oriented approach to both home ownership and property investment.
Empty nesters prioritising affordability and practicality
Retired and relaxed empty nesters are redefining suburban affordability. This older demographic prefers three- to five-bedroom homes in safe, low-density neighbourhoods near shops and public transport. They prioritise affordability and practical features like secure storage, while avoiding older buildings and high council rates. As investors, they focus on properties with low vacancy rates and strong rental returns, showing less interest in capital growth and market fluctuations.
Why do we need to know about this?
This research offers valuable insights for urban planners, real estate agents, and policy makers. Understanding what drives property decisions can help inform more targeted and inclusive housing strategies, from zoning laws and new housing developments to transport planning and addressing social equity.
For example:
- If suburban buyers strongly prefer detached homes, that could impact how we plan for population growth in those areas.
- If investors are drawn to rental returns or lifestyle-oriented locations , that may shape where new investment-focused housing should be built.
- If cultural preferences influence neighbourhood choices, planners may need to consider how these behaviours affect diversity and inclusion in cities.
Who can use this research?
- Homebuyers and investors can use these insights to understand how others in the market make decisions.
- Developers and agents can tailor offerings based on what different buyer segments value most.
- Policy makers and city planners can use these findings to guide housing development, transport infrastructure, and community planning.
- Community advocates may use this research to address issues around social equity and residential segregation.
This research broadens our understanding of the housing market by highlighting how buyer priorities are shaped by a complex interplay of cultural, lifestyle, and economic factors. It reveals not just what Australians want in their homes—but also what they value in the communities they choose to be part of.
To read the full paper > https://doi.org/10.1080/02673037.2024.2428749
For further enquiries with the lead author > Ali.Ardeshiri@unisa.edu.au
