Which suburbs are recovering fastest from the downturn?
The Australian property market is on a clear path of steady recovery, and new data has revealed the postcodes leading the way.
The latest Domain House Price Report shows prices are back on the rise, with Sydney, Adelaide and Perth leading the recovery.
“What’s different in this House Price Report compared to the last one is that we saw recovery last time being centred around those really premium suburbs in capital cities,” says Domain chief of research and economics Dr Nicola Powell. “What we’ve seen this time around is some of those middle ring areas performing well.”
“What we’re seeing now is that ripple effect is happening. You’ve still got those premium areas showing a bounce back in price, but it’s actually rippled out to those middle-end suburbs.”
Growth across capital city suburbs might seem like a big jump, but Powell says we’re seeing price points snapping back much like an elastic band.
“We’ll see a normalisation of price,” she says.
Currently, the areas leading the path to recovery are a mix of premium-end and middle-priced suburbs, creating diverse price points and recuperating the losses from last year’s downturn.
“It normally starts with those more premium areas, and then it ripples out, and then you start to see slower rates of growth in the premium areas, and then the middle and outer areas appear to outperform the more premium markets,” says Powell.
“Eventually, I think what we’re likely to see is that we will be on a steady recovery for prices across Australia.”
With steady recovery comes steady price growth, which should aid in alleviating affordability hurdles many buyers are facing, Powell says, adding that while prices are rising, they’re generally rising slowly – a far cry from the skyrocketing prices produced by the pandemic boom.
Sydney
In Sydney, there are regions like Pittwater on the northern beaches where prices have fallen 3.4 per cent annually but have risen 20 per cent in the last quarter to a median of $2.299 million.
This sort of growth is expected because it comes from one of Sydney’s premium markets; what’s interesting is seeing Dural-Wisemans Ferry – an outer north-west area – joining the highest growth ranks, says Powell.
Prices in the Dural-Wisemans Ferry region grew 13.4 per cent in the last quarter, with houses at a median of $1.815 million.
Michelle Chen of GCG Real Estate says that Dural’s popularity grew immensely during the pandemic, as many home owners who had expensive apartments in the city became able to work from home, so many people decided to move out to Dural for the same price but with more space.
“Dural is the big garden of Sydney,” she says.
“A house in Dural makes you feel like you’re in the Hunter Valley, but instead of being a two-hour drive from the city, you’re only 40 minutes away,” Chen says. “Plus, you get so much land. Almost each house has at least five acres (2.02 hectares) of land.”
Much like many other suburbs, supply in Dural cannot meet demand, so prices have jumped.
Melbourne
In Melbourne, price growth is also being led by diverse markets.
The typically affordable Melton-Bacchus Marsh region saw the unit median price jump by 5.6 per cent in the last quarter to a median of $865,000.
Powell says that when outer regions see this level of growth, there’s usually a movement of affordability.
“A unit in that area would look different from a unit you buy in the CBD, but what that is showcasing is that people are seeking affordability in terms of location and that diversity in property type,” she says.
Local agent Kirsteen Ryder of Ryder Real Estate Melton agrees with Powell, saying that she’s seen many clients turn away from houses to units because it’s what they can afford.
“Melton is an affordable area in western Melbourne, with lots of first-time home owners,” she says. “A fairly new two to three-bedroom unit is the same price of what you could pay for a house a few years ago.”
Ryder has seen an influx of first-time home owners moving into the area because landlords have been selling their properties, allowing people with lower borrowing capacity to enter the property market.
Brisbane
The housing market in Brisbane has seen a much slower recovery rate, with just 0.9 per cent growth in the last quarter. However, suburbs leading the way saw more significant rates of growth.
In the Holland Park-Yeronga region, house prices increased by 6.8 per cent in the past quarter, bringing the median cost to $1.175 million.
“One of the reasons it’s been growing so much is because of the number of properties in the market. There aren’t too many sales happening in the market, and [Cavendish Road State High School] is quite popular,” says real estate agent PJ Gholami of Coronis Inner South.
“Many people want to be in that catchment, and it’s been driving up prices, especially when there isn’t enough property in the market,” he says.
“While other areas have seen a decline in price, Holland Park has seen growth because anything that comes into the market goes pretty quick, and people are willing to pay more.”
Adelaide
Unlike other capital cities, Adelaide didn’t experience a downturn. Instead, it saw continuous steady growth that pushed it to set price records.
“Adelaide tends to avoid downturns, and it continues to be a good achiever over time. This changed during the pandemic because we saw a substantial upswing. Adelaide was one of the top performers in terms of growth during the pandemic,” says Powell.
In its Port Adelaide-East SA3 region, the median unit price rose by 11.8 per cent in the last three months. Now, the median sits at $430,500.
Rick Schultz of Ray White Port Adelaide attributes the growth to all the new developments completed in the area.
“A lot of the character properties have been renovated and leased out to new business owners, and that has brought in a new younger crowd into Port Adelaide,” he says.
A fish market has been turned into a new pub, and an old hotel has been redeveloped into multiple apartment units, making the area desirable for young first-time buyers looking to enter an affordable market.
“While COVID did slow down infrastructure development, it didn’t hinder prices. I put down a contract on an apartment that a lady bought off the plan for 317 [thousand] three years ago, which was before COVID, and she’s about to sell it for 500 [thousand],” says Schultz.
He expects the growth to continue well into the year as people who can’t afford detached dwellings turn to apartment living instead.
Median prices in other regions like Gawler-Two Wells and Prospect -Walkerville grew by 8 per cent and 8.6 per cent, respectively, pushing the median price for houses into the millions.
Perth
Much like Adelaide, Perth’s market managed to avoid last year’s downturn and grew steadily.
The SA3 region of Bayswater-Bassendean leads the growth pack in Perth, with a 6.4 per cent quarterly upswing after experiencing a negative 12 per cent annual change.
Typically when prices swing back dramatically, the leaders are those who experienced a significant decline and are now recovering what was lost during the downturn, says Powell.
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