Sydney suburbs where buyers pay cash,
Home buyers in Sydney are spending millions in cash on downsizer homes, tree-change retreats, and investment properties.
Interestingly, these buyers do not require a mortgage for their purchases.
In the 2024 financial year, cash property transactions in NSW totaled $61 billion.
This marked a 22.7% increase compared to the previous year, according to data from settlement platform PEXA.
Certain suburbs are seeing high volumes of cash purchases, particularly as long-term homeowners downsize from family homes.
They are often trading up to luxury apartments, which are in high demand.
The Sydney CBD saw the highest volume of cash sales, amounting to $1.687 billion in total sales for the year.
Following this, Marsden Park recorded $1.122 billion in cash purchases, likely including vacant land or new home investments.
However, the median price per property in Marsden Park was approximately half that of the Sydney CBD.
Meanwhile, affluent suburbs such as Mosman saw $1.095 billion in cash transactions, reflecting the area’s high property values.
Other suburbs with significant cash sales include Darling Point, with $688 million; Bondi Beach, at nearly $686 million;
and Randwick, which saw $527 million in cash purchases.
In Mosman, the median price for a cash purchase reached $2.7 million per home.
Similarly, in Darling Point, the median value was $2.5 million per property.
The NSW suburbs where the highest amounts of cash are spent on property.
| Suburb (postcode) | Aggregate value of cash purchases ($M) | Median cash purchase value |
|---|---|---|
| Sydney (2000) | $1,686.6 | $1,650,000 |
| Marsden Park (2765) | $1,121.7 | $850,616 |
| Mosman (2088) | $1,095.2 | $2,700,000 |
| St Leonards (2065) | $816.4 | $1,390,000 |
| Oran Park (2570) | $739.7 | $920,000 |
| Waterloo (2017) | $689.7 | $1,050,000 |
| Darling Point (2027) | $688.4 | $2,500,000 |
| Bondi Beach (2026) | $685.7 | $1,856,000 |
| Sanctuary Point (2540) | $533.9 | $750,000 |
| Randwick (2031) | $527.4 | $1,460,000 |
PEXA’s chief economist, Julie Toth, explained that buyers in wealthier suburbs are less likely to need a mortgage.
In some cases, they may be using family trusts, equity from other properties, or alternative financing arrangements.
Toth noted that this trend largely reflects the high purchasing prices in these areas.
She further explained, “We are seeing a small number of very high-value properties being bought without traditional mortgage financing.”
At the very top end of the market, buyers have access to a wider range of financial resources.
Therefore, these purchases do not appear as mortgage-backed transactions.
Toth concluded that the majority of cash spending occurs in Sydney’s most prestigious suburbs.
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In the Sydney CBD, the median price for cash purchases was $1.65 million, Toth noted.
However, moving further out, suburbs like Mosman and Bondi Beach have even higher median values.
Toth explained that this trend is likely due to existing homeowners relocating within these areas.
When these homeowners move, they often do not require a mortgage.
The census data shows where homeowners own their properties outright, and it tends to reflect generational patterns.
Older individuals who have had many years to pay off their mortgages are typically found in these areas.
As a result, established suburbs with wealthier, older residents are more likely to appear on these lists.
Toth also observed that cash purchases were more common in regional towns favored by retirees.
For example, more than two-thirds of property purchases in Gloucester were made in cash.
Additionally, areas where buyers prefer to purchase land and build later, such as greenfield suburbs, show higher cash purchase rates.
The NSW suburbs with the highest volume of property purchased in cash.
| Suburb (postcode) | Percentage of cash purchases | Median cash purchase value |
|---|---|---|
| Gloucester (2422) | 67.7% | $542,500 |
| Braidwood (2622) | 59.4% | $675,000 |
| Tenterfield (2372) | 59.4% | $375,000 |
| Temora (2372) | 56.6% | $330,000 |
| Lismore (2480) | 56.1% | $459,000 |
| Lake Cathie (2445) | 55.8% | $812,500 |
| Laurieton (2443) | 55.7% | $710,000 |
| Moama (2731) | 54% | $300,000 |
| Milsons Point (2061) | 54% | $2,055,000 |
| Narooma (2546) | 53.9% | $750,000 |
“They also see a high proportion of land-only sales,” Toth explained. “What’s happening here may not involve first home buyers.”
Instead, buyers could be purchasing blocks of land with cash and planning to build later.
The financing process for self-build projects can be quite complicated, she added.
Lenders are often reluctant to provide funds for construction when there is no existing home to use as collateral.
On the lower north shore, Atlas director Michael Coombs is receiving inquiries from downsizers.
These clients are selling their luxury family homes to purchase smaller properties.
Coombs noted, “When they’re in these larger homes, there’s no urgency. They don’t owe money on them, and values have risen significantly.”
They sell when market conditions are favorable, he explained.
Sellers may seek a country home or a downsizer apartment, often using proceeds to boost their retirement savings.
Additionally, they may help their children with a portion of the deposit for their own homes.
“When people stay in a property long term, it becomes their retirement asset, where they build wealth,” Coombs said.
He cited examples of homeowners who purchased 30 years ago for $3 million and are now selling for $30 million.
Coombs is also working with expats who have returned to Australia and can pay cash for upgraded homes.
These buyers benefit from the appreciation of their Australian properties during their time overseas.
Buyer’s agent Rich Harvey has encountered owners nearing retirement age who have built up significant equity.
These owners often plan to downsize and live without a mortgage, he explained.
Harvey noted that this transformation is life-changing, as it allows for tax-free capital.
It also enables them to assist children with a home deposit while moving into a more manageable property.
Such properties are often lower maintenance, with lock-up-and-leave features that enable travel, Harvey added.
However, he cautioned that some sellers seeking a unit or sea-change may find high property prices limit their options.
Stamp duty can also be a barrier, further restricting their purchasing power.
Harvey has also observed new migrants, with permanent residency or citizenship, paying cash for property purchases.
Wealthy business owners who have sold their businesses are also in a position to pay in cash.
Some investors, particularly those who are retired, choose to pay in cash.
However, Harvey believes many could benefit more from leveraging their investments, rather than using all cash.
