Startling numbers put housing market correction and gloomy headlines in perspective
New data released today has put Australia’s current property market correction and gloomy media headlines in stark perspective.
Nationally, property prices have fallen 3.53% from their peak in March, while across the combined capital cities they are now down by 4.38%.
The sharpest declines have been seen in Sydney, with prices slumping 6.28% from their peak, followed by Melbourne, with a 4.75% fall from its peak.
But new analysis by PropTrack of price growth movement since the start of the Covid pandemic in March 2020, when most markets began to surge, shows markets are still well ahead.
“Rising interest rates since May have constrained buyers and this has caused property prices to decline in most markets,” PropTrack economist Anne Flaherty said.
“But in the majority of areas, the price falls we’ve so far seen remain well below the enormous gains recorded since the start of the pandemic. For example, across the capital cities, prices are still up 24% and in regional areas, they remain a whopping 47% higher.”
Take the suburb of Austral in Sydney’s southwest, where the current median house price of $1.01 million is a staggering 142% higher than at the start of the pandemic.
Or, also in New South Wales, Greta in the Hunter Valley has a current median house price of $888,000, which is a whopping 130% higher than when Covid kicked off.
“NSW has seen the most high-growth suburbs,” Ms Flaherty said. “Topping the list for price growth in the state are suburbs in outer Sydney, as well as lifestyle-rich regional areas.”
In every state and territory, recent price corrections pale in comparison to the significant value growth recorded in the wake of Covid in top performing suburbs.
Property price falls in recent months pale in comparison to significant gains recorded after the onset of Covid. Picture: Getty
For example, in Victoria, the median house price in the Mornington Peninsula suburb of Blairgowrie is 84% higher, sitting at $1.695 million.
Meanwhile in Queensland, Upper Caboolture, north of Brisbane, has a median house price of $754,000, which is 84% higher than in March 2020.
Apartment growth has been just as strong in many suburbs, with the West Australian suburb of Cable Beach in Broome seeing a 126% surge in its median unit price of $362,000.
In Narooma on the NSW South Coast, the median unit price has shot up 115% to reach $618,000, while in Sunshine Beach in Queensland it’s up 104% to $1.6 million.
“Many of the suburbs that have seen the largest gains since the onset of the pandemic are in scenic, lifestyle areas,” Ms Flaherty said.
“For many Australians, Covid led to a rethink in how and where they want to live. Then, the rise in remote working enabled many to move further away from capital cities.
“Because of this, many sea- and tree-change suburbs saw buyer demand surge, accompanied by strong price growth.”
Top performers in New South Wales
Another trend that sparked strong demand and steep price growth was the desire for more room to move, be it a larger dwelling, bigger backyard, or less dense suburb.
Alongside Austral, another outer Sydney suburb that saw big gains is Box Hill in the city’s west, where the median house price of $1.27 million is now 125% higher than at the start of Covid.
Covid saw many homebuyers desire bigger homes on bigger blocks – and they hit the outer suburbs in search of them. Picture: Getty
Local agent Binnie Jaura from Ray White said despite the sharp rise, the area still appeals to first-home buyers chasing a lot more bang for their buck.
“Stock levels are significantly lower than a year ago, yet buyer demand remains strong,” Mr Jaura said.
“We are looking forward to next year as we already have multiple listings signed and ready to launch in the first month of 2023. The market is continuing to stabilise, which therefore assists us in achieving a higher price for our vendors.”
In the Southern Highlands hotspot of Berry, the chance to live minutes from the beach while being surrounded by rolling green hills, all an easy drive from Sydney, proved to be irresistible, local agent Jacqueline Crapp from Raine & Horne said.
“Now, with more flexibility with working from home, many are making the lifestyle move to the South Coast,” Ms Crapp said.
As a result, there has been a 133% explosion in the median house price since Covid, now sitting at $2.275 million.
The tree-change drive sparked a boom in Berry’s housing market. Picture: realestate.com.au/sold
During the pandemic, high demand and very low supply saw prices surge, and while things have cooled in recent months, she said buyer interest is still strong.
“Stock numbers in Covid were under pressure and at any given time the whole market only had 20 or so properties on offer. The Berry region now has more than 80 properties on the market, with a good offering across all price points.
“Days on market are now longer and buyer urgency has disappeared. Wet weather and negative media have certainly not helped this at all.
“But I think the market will find its new norm next year. Interest rates will cease increasing hopefully in the not-too-distant future and buyer confidence will creep back in.”
The increasingly popular coastal town of Yamba in the Coffs Harbour region has been touted as a future Byron Bay, as sea-changers and weekenders seek more affordable seaside options.
That’s helped to drive an 81% increase in its median unit price, which is now $775,000.
Local agent Daniel Kelly from Ray White said its world class beaches and surf breaks, family friendly atmosphere and fantastic restaurant scene had seen buyers flock to Yamba.
“We are incredibly lucky to be a relatively small town that offers just the right amount of atmosphere and the perfect coastal lifestyle,” Mr Kelly said.
“Since Covid, our town has seen a significant increase in demand as people sought a sea-change, and relative to other coastal areas, Yamba is quite affordable.”
Coastal towns like Yamba surged in popularity in the wake of Covid. Picture: Getty
The market recently has “normalised” with steadier conditions and more consistent sales results, he said, but many buyers remain active on the ground. Next year will likely see “more of the same”.
A regional lifestyle with plenty of outdoor recreational amenities has also seen the alpine locale of Jindabyne rocket up the list of sought-after suburbs in NSW.
Since the start of the pandemic, the median unit price in the Snowy Mountains town has leapt by 113% to reach $810,000.
An array of winter and summer activities, a friendly atmosphere, an abundance of natural beauty, and quick access to the South Coast make it a popular choice for buyers, local agent Michael Henley from Henley Property said.
“There has been a huge migration to our town from all over Australia and a few from around the world,” Mr Henley said.
Units in Jindabyne have been in hot demand since the onset of the pandemic. Picture: realestate.com.au/sold
Jindabyne has also been designated a Special Activation Precinct by the NSW Government, sparking significant planned investment in facility upgrades and development.
According to the Department of Planning and Environment, SAPs benefit from projects to “attract and grow businesses, provide more employment opportunities, and stimulate the regional economy”.
“It will leverage the region’s environmental, cultural, and landscape attributes and establish Australia’s alpine capital as a resilient year-round tourism destination,” the Jindabyne SAP reads.
Top performers in Victoria
No-one in the country had a Covid experience quite like Melburnians, who endured several long and painful lockdowns and some of the toughest restrictions in the world.
That inspired hordes of people to get out of town when they could – and it seems many wound up in the Mornington Peninsula.
“In Victoria, suburbs along the Mornington Peninsula have seen the strongest price rises post-Covid,” Ms Flaherty said.
Desperate Melburnians fled the city during Covid – and many landed in the Mornington Peninsula. Picture: Getty
Somers is “the ideal coastal village”, local agent Jackie Wright from The Coast Real Estate said, with a quaint and peaceful feel and spectacular natural amenities.
Since the onset of Covid, the median house price there surged by 98% to reach $1.82 million.
“I think people must have sat at their computers during lockdown and looked where they could drive an hour from Melbourne, with Somers obviously the top result,” Ms Wright said.
The pace is somewhat more relaxed than glitzier Mornington Peninsula suburbs, with no local postal delivery service harnessing a village feel, she said.
“The hub of the community is the [general] store and post office. A morning walk to collect your mail will often lead to catching up for a chat and a coffee with friends. People love the quirkiness of that.”
Ms Wright expects the market to settle over summer and the start of the New Year before ramping up again in autumn, as it tends to do each year.
Despite the Covid exodus, affordable units in prized suburbs in Melbourne remain in demand. Picture: Getty
The community feel of the leafy inner-city suburb of Blackburn saw buyers flock to it over the past few years. Its median unit price leapt by 53% to hit $868,000.
Local agent Rachel Waters from Woodards said the area appealed to older downsizers, first-home buyers and young families because of its safe and friendly feel.
“Blackburn has an active community and offers good schools, shops, and transportation,” Ms Waters said. “More than ever before, buyers see value in accessibility to parkland and walking tracks – for example Blackburn Lake or the Bellbird area.”
Apartments with a study or extra bedroom to allow people to work from home have been especially popular.
“After several rate hikes, we’ve found that those taking out a mortgage have less to spend on their home, but this hasn’t stopped many from continuing their search for the right property at the right price,” she said.
“We may see some price adjustments if interest rates continue to go up, but the Blackburn market continues to be a popular choice for those looking for a reliable investment in a convenient location.”
Top performers in Queensland
On top of the desire to be closer to nature, southeast Queensland’s housing markets had to contend with an unprecedented influx of arrivals from interstate during Covid.
Many of those buyers went straight to the Gold Coast, with the picturesque suburb of Mermaid Beach seeing its median house price leap 110% to $3.32 million.
The Gold Coast property market exploded in the wake of Covid. Picture: Getty
Local agent Guy Powell from Harcourts Coastal said development restrictions limiting building heights to 15m, or three storeys, set the suburb apart from the rest of the region.
“It can’t get overdeveloped, helping Mermaid Beach keep its community spirit and coastal charm, Mr Powell said.
“It’s a family friendly environment, it feels grass roots. We’re built around the sand and sea, but in the past 10 years the coffee culture and hospitality scene has really stepped up.”
Before Covid, the entry level price for a small, original condition house was about $1.3 million, whereas now it’s in the mid-$2 million range, he said.
“Covid really put the GC on the map and work from home, locked borders, and no international travel only shone a torch and highlighted the life we get to live here.
“As of lately, there are some beautiful new builds and projects coming up to completion or being completed, redefining the area and further cementing Mermaid Beach as one of the Coast’s most sought-after suburbs.”
Mermaid Beach is home to some of the Gold Coast’s most expensive homes. Picture: realestate.com.au/sold
Some of the heat has come out of the market in Mermaid Beach, as it has across the Coast, with buyer demand easing. But Mr Powell said stock levels remain tight, which he believes will see the suburb “hold and retain its value”.
“A lot of owners are high net worth individuals who don’t or won’t have to sell should 2023 become an interesting year. The area and location itself will always be really sought-after and weather any storm well.”
In the Redcliffe region, northeast of Brisbane, the suburb of Woody Point has been in demand with those searching for an affordable unit in a peaceful location.
The median unit price is now $611,000, which has surged by 53% since the onset of Covid.
“People love the relaxed village lifestyle on offer in Woody Point, while holding onto the convenience of being only a short commute to the Brisbane CBD, international airport, or the Gold Coast and Sunshine Coast,” local agent Damien Misso from Ray White said.
“Covid was a boon for Woody Point as people sought to escape the CBD but keep proximity. When you were only allowed to travel a short distance from home, people realised being here was a good option.”
A yearning for a slower pace of living has seen the Redcliffe region boom in popularity. Picture: Getty
More recently, the market has settled from the peak of early 2022, but Mr Misso said people are still drawn to the “natural wonder” of Woody Point.
“In my opinion, I see a lot of opportunity in the next phase of our market and those who are prepared will be the ones who benefit the most,” he said.
Top performers in South Australia
Adelaide’s top performer since Covid is the prestigious suburb of Beaumont, where the median house price skyrocketed by 82% to $1.64 million.
Local agent Brandon Pilgrim from Ray White said the desire for large, well-designed family homes on big blocks saw buyer demand go through the roof.
“On top of that, Beaumont offers arguably the best local school zones in the state, being dual zoned with the very desirable Linden Park Primary School and Burnside Primary School, and the high school being the prominent Glenunga International High School,” Mr Pilgrim said.
“Not to forget that Beaumont is sitting on the ledge of the Adelaide foothills offering high-quality family homes with panoramic views across the city.”
Beaumont is a prized part of Adelaide – even more so since Covid. Picture: realestate.com.au/sold
The picturesque pocket is also surrounded by an array of quality restaurants, cafes and shops, and is a short drive to the CBD, he added.
“It has continued to remain the destination to live and raise your family and although interest rate rises have dampened the growth in the area, we are still finding the market buoyant,” he said.
“I think Beaumont will always have higher buyer demand than most of Adelaide. We predict that the market will be steady for the next two years while inflation levels out.”
Top performers in Western Australia
A yearning for a home near the water wasn’t confined to buyers in the country’s east, with Perth property hunters flocking to Bicton on the Swan River.
The median house price there rose sharply by 72% to hit $1.5 million since the onset of Covid.
Homebuyers flocked to Bicton in search of a home by the water. Picture: Getty
Local agent Ben Stott from Ross & Galloway said the suburb’s prized position made it a hotspot when the Perth market began to move in September 2020.
“It was like a switch was flicked and the market went crazy,” Mr Stott said. “I was receiving multiple offers on homes with many going well over expectations with nearly all listings selling in week.”
As well as its riverside position, Bicton boasts some amazing natural amenities including Blackwell Reach, Point Walter Reserve, Bicton Baths, and Point Walter Golf Course.
It proved particularly popular with families, with well-presented homes on good-sized blocks selling the best, he said.
“In the past few months, I am still seeing the same number of buyers coming to home opens but properties are taking slightly longer to sell, with still most selling within four weeks,” Mr Stott said.
“I honestly thought that the market would have had a correction by now, but we have a big supply and demand issue in Perth. I think prices will just stay steady for the foreseeable future.”
There’s still strong interest in well-presented properties in Armadale. Picture: realestate.com.au/sold
On the other side of the city in Perth’s southeast, the affordable suburb of Armadale has seen strong demand for units. The median unit price jumped by 60% since the onset of Covid to reach $270,000.
“Armadale offers affordable living for homeowners and great rental returns for investors,” local agent Ashley Swarts from O’Neil Real Estate said.
“For the past two years, most of our buyers locally were from out of area, with plenty of sales going through without the buyers even personally inspecting the property.
“We had buyers from Sydney, Melbourne, Queensland, and even Tassie pulling equity out of their homes to buy investment properties here. With record low vacancy rates, rents are still very high, and investors are getting great returns.
“Homes are now taking longer to sell, and buyers are getting fussier,” he said. “They want a premium home so anything that needs work typically sells for a discount, while well-presented homes are fetching good money.”
Top performers in Northern Territory
With the international border closed and many states shutting down to the rest of Australia, the Northern Territory provided something of a Covid escape for much of the pandemic.
Susie Patton-Quinn from Real Estate Central said a number of those interstate tourists hit the Top End and fell in love, deciding to uproot and relocate permanently.
The popular up-market suburb of Muirhead in her patch proved particularly popular with all buyers after the onset of Covid. Its median house price surged by 114% to hit $754,000.
Muirhead is a sought-after suburb in Darwin. Picture: realestate.com.au/sold
“Muirhead is a very popular up-market suburb that’s highly sought after by families and professionals, particularly medical staff and academics, due to its very close proximity to Royal Darwin Hospital and Charles Darwin University,” Ms Patton-Quinn said.
The market has slowed in recent months after a “frenzy” for much of the past year-and-a-half, she said.
Despite that, there are many long-term growth drivers for Darwin, with the Territory Government investing significantly in projects to drive economic expansion.
“There’s so much positivity on the horizon, from gas, solar, shipping and mining projects, to major defence investment, and even NASA’s involvement in the Arnhem Space Centre,” Ms Patton-Quinn said.
Top performers in Tasmania
The Apple Aisle was one of the country’s standout property performers during the pandemic, with strong price growth across the state.
Top performers in Australian Capital Territory
The seemingly bulletproof Canberra housing market continued an extraordinarily strong run after the onset of Covid.
By Shannon Molloy
Originally published by realestate.com.au
