The top three capital cities where property prices are already recovering – and where to buy before prices rise again
Now that house prices have steadied across Australia, with some areas showing an actual price bounce for the first time in a year, the questions everyone is asking are: Is this the sweet spot? And where are the best places to buy?
We know all the usual advice about choosing areas that have great public transport links and good amenities, and aren’t too far from the CBDs if people continue to go back to the office.
But there are also clues to be had from the latest price movements. There are three cities leading what’s been described as Australia’s “cautious signs of recovery”: Sydney, Melbourne and Brisbane.
It’s the suburbs in these capitals where house prices have dropped over the last year – rendering them more affordable – but are now showing an upward lift, that offer opportunities for buyers wanting to crack the market at a good time.
Domain chief of research and economics Dr Nicola Powell said this could be an excellent signal that prices may continue to rise in those places.
“We’re certainly seeing some areas leading the recovery, like the eastern suburbs, Northern Beaches and city and inner south of Sydney, and Victoria’s Mornington Peninsula and inner-east in Melbourne,” she said.
“They hit their troughs earlier with price falls and are now further along in the price cycle than many of the other areas.
“So this speaks to the ripple effect of the recovery of the housing market – and those areas where prices have deteriorated the most, and are now bouncing back, provide lots of good opportunities for buyers.”
SYDNEY
| Sydney SA3 region | Property | Median price | Quarterly change | Annual change |
| Kogarah – Rockdale | House | $1,497,500 | 0.2% | -9.0% |
| Canterbury | Unit | $530,000 | 0.5% | -3.3% |
| Canada Bay | Unit | $985,000 | 0.5% | -1.5% |
| Carlingford | House | $1,600,000 | 0.6% | -5.4% |
| Warringah | House | $4,330,000 | 0.7% | -16.9% |
| Merrylands – Guildford | House | $1,958,000 | 0.7% | -6.2% |
| Hurstville | Unit | $1,310,000 | 0.8% | -3.0% |
| Camden | House | $958,500 | 0.9% | -2.2% |
| Ku-ring-gai | House | $5,800,000 | 1.2% | -11.5% |
| Ryde – Hunters Hill | House | $2,175,000 | 1.2% | -8.2% |
| Pennant Hills – Epping | Unit | $1,458,000 | 1.3% | -8.9% |
| Auburn | Unit | $1,360,000 | 1.5% | -2.7% |
| Liverpool | House | $978,500 | 1.9% | -3.9% |
| North Sydney – Mosman | House | $3,370,000 | 2.1% | -8.1% |
| Eastern Suburbs – South | House | $5,560,000 | 2.2% | -10.3% |
| Blacktown | House | $880,000 | 2.3% | -6.5% |
| Sydney Inner City | Unit | $1,800,000 | 2.3% | -7.2% |
| Chatswood – Lane Cove | House | $6,260,000 | 2.6% | -10.6% |
| Manly | House | $6,800,000 | 3.0% | -14.4% |
| Pennant Hills – Epping | House | $4,120,000 | 3.0% | -6.8% |
| Mount Druitt | Unit | $412,500 | 3.1% | -3.4% |
| Baulkham Hills | House | $3,760,000 | 3.9% | -2.8% |
| Pittwater | House | $4,720,000 | 4.9% | -16.5% |
| Marrickville – Sydenham – Petersham | Unit | $1,600,000 | 6.1% | -3.0% |
| Strathfield – Burwood – Ashfield | House | $4,000,000 | 7.0% | -10.2% |
| Sydney Inner City | House | $3,780,000 | 11.2% | -5.0% |
In Sydney, for instance, there are regions like Kogarah-Rockdale in the inner south-west where prices have fallen by 9 per cent over the year but have risen 0.2 per cent in the last three months, to a median of $1,497,50.
It’s a small increase, but it could be significant, said James Kirkland, director of sales at Upside Realty.
“We’re seeing low supply and high demand at the moment which is a great sign for price growth,” he said. “We’ve seen a sharp increase in the numbers of people coming through our open-for-inspections and a big step-up in the number of registered buyers at auctions.
“During COVID we saw a lot of people moving away from the inner cities as they could work from home, but there’s now a lot of interest in homes within a 10 kilometre radius of the CBD.”
Buyers now know what they can borrow and, with more optimism about interest rates not rising too much further, they feel happy about buying, especially with reports that the market has bottomed out, Kirkland said.
Retired golf course supervisor Garry Smith has been a clear beneficiary of the new spring in the market’s step.
He recently put his late parents’ four-bedroom, three-bathhouse house at 17 Parliament Terrace in Bexley on the market, hoping for $1.5 million.
It was snapped up by an investor for more than $100,000 over its reserve, fetching $1.608 million.
“My parents bought that house in 1966 for £2300,” said Smith, 62, who’s given the proceeds to his 34-year-old son and daughter, 30, to enable them to finish paying off their own homes.
“But it was probably a third the size of what it is now. My mother kept adding on rooms as she needed them.
“But while it was an old house, it was sturdy and, while it was a little bit wonky in some ways, it was still very liveable. It could do with some modernisation. But I think Bexley will be a very popular area as it’s very multicultural and community-minded and everyone knows everyone.”
Other areas that could prove to be a good buy are: Pittwater on the Northern Beaches, where prices have slid 16.5 per cent over 12 months but jumped 4.9 per cent in the most recent quarter; nearby Warringah, which is down 16.9 per cent and but now edging into positive territory, rising by 0.7 per cent this year; and the city and inner south, which fell by only 5 per cent but has bounced up 11.2 per cent.
MELBOURNE
| Melbourne SA3 region | Property | Median price | Quarterly change | Annual change |
| Knox | House | $901,000 | 0.1% | -7.1% |
| Whitehorse – East | House | $1,151,000 | 0.1% | -9.4% |
| Boroondara | House | $2,405,500 | 0.2% | -1.6% |
| Dandenong | House | $786,500 | 0.3% | -2.9% |
| Essendon | House | $1,350,000 | 0.7% | -12.9% |
| Maribyrnong | Unit | $450,000 | 1.0% | -10.0% |
| Manningham – East | House | $1,668,500 | 1.1% | -1.9% |
| Glen Eira | House | $1,600,875 | 1.6% | -7.0% |
| Darebin – North | House | $865,000 | 1.6% | -8.9% |
| Yarra | House | $1,420,000 | 1.7% | -5.3% |
| Brunswick – Coburg | House | $1,170,000 | 2.0% | -6.6% |
| Stonnington – West | House | $2,160,000 | 2.0% | -2.4% |
| Manningham – West | House | $1,431,000 | 2.1% | -4.6% |
| Monash | House | $1,360,000 | 2.3% | -1.4% |
| Stonnington – West | Unit | $619,500 | 2.4% | -2.6% |
| Melton – Bacchus Marsh | Unit | $815,000 | 2.5% | -3.0% |
| Maribyrnong | House | $939,999 | 3.0% | -6.0% |
| Mornington Peninsula | House | $1,155,100 | 3.1% | -7.6% |
| Darebin – South | Unit | $590,000 | 3.2% | -4.8% |
| Maroondah | House | $940,000 | 3.3% | -6.7% |
| Whitehorse – West | House | $1,335,000 | 3.4% | -7.9% |
| Kingston | Unit | $641,800 | 3.5% | -2.8% |
In Melbourne, there’s plenty to choose from too, especially with prices dropping less, generally, than in Sydney.
In Essendon in the inner city, for instance, prices slumped by 12.9 per cent over the past year, but have lifted by 0.7 per cent recently, while in the outer east, Whitehorse fell 9.4 per cent but is up by 0.1 per cent.
House prices in Darebin in the north fell by 8.9 per cent before rising 1.6 per cent, and in Knox, also in the outer east, they fell by 7.1 per cent only to rise later by 0.1 per cent.
“Knox, in general, is one of those areas that’s still quite affordable, with a good quality of life and good amenity,” said Adam Sorrell of Ray White Rowville.
“It’s always been very popular to buy into and live in and most people, when they’re there, don’t leave.
“There’s just a lot of demand which is driving prices up and I think prices will now maintain their stability.”
BRISBANE
| Brisbane SA3 region | Property | Median price | Quarterly change | Annual change |
| Brisbane Inner – East | House | $1,445,000 | 8.9% | -5.1% |
| Brisbane Inner | House | $1,387,500 | 6.7% | -4.3% |
| Kenmore – Brookfield – Moggill | House | $1,200,000 | 3.9% | -4.0% |
| Capalaba | House | $758,000 | 0.7% | -5.3% |
| Springwood – Kingston | House | $520,000 | 0.4% | -1.0% |
| Bribie – Beachmere | House | $685,500 | 0.1% | -2.1% |
The housing market in Brisbane has seen some very healthy price rises over the last quarter, ranging from 8.9 per cent in the inner east – against a 5.1 per cent annual fall – 6.7 per cent in the inner city (down 4.3 per cent on the year), and 3.9 per cent in the west (down 4 per cent).
Hutton & Hutton principal Peter Hutton said that was mostly a reflection of the shortage of stock and increasing buyer confidence forcing prices up. “The inner east is always popular because of its village atmosphere and really good infrastructure that’s improving all the time,” he said. “There’s [also] a lot of focus on the area because of the coming Olympics.
“But generally there’s a lot less stock and some sellers are holding off as they’re nervous about finding another place to live and don’t want to rent because of the shortage of homes there, too. And buyers are becoming more confident about buying.”
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