Numerous units in this building in the Sydney Olympic Park region have sold for similar levels to prices in 2016.
It would seem like fantasy – but in a world of soaring inflation, where a coffee that once cost $3 now costs $7, it is actually still possible to land homes in parts of Australia for the same price as in 2016.
Exclusive PropTrack data has revealed multiple pockets of Sydney, Melbourne, Darwin and one Queensland area where the unit prices have been in the deep freeze over the past 10 years.
SCROLL BELOW FOR SUBURBS IN NSW, VIC, QLD AND NT
Experts explained the reasons for the stunted prices were often complex but a common theme across these areas was a glut of apartment sales thanks to years of high-rise development.
This was especially the case in Sydney where developers overly concentrated development in a handful of areas with favourable zoning, while widespread housing shortages continued elsewhere.
It was a similar situation within the inner suburbs of Melbourne, which had the highest rates of new apartment construction in the country over the 2010s – by some measure.
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$110k price drop in 11 years: this unit on Australia Ave in Sydney Olympic Park recently sold for $655,000. The 2015 price was $765,000.
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High-rise development in certain parts of Melbourne and Sydney was so rampant that the supply of units exceeded the number of buyers who wanted them.
An oversupply of units, coupled with frequent sales to investors, also meant tenant competition for rentals was suppressed.
Over time, this eroded the rental returns and drove up vacancy rates, discouraging new investors from buying in these areas and exacerbating the supply to demand imbalance.
A further complicating factor was that the type of units built in these areas were often smaller homes aimed squarely at the investor market, not owner occupiers.
Once investors left these markets, so too went the primary buying market for them and the prices began to flatline.
Fast forward to today and owner occupiers wanting a cheaper entry point onto the property ladder, without the stiff competition recorded in other areas, can often pick up homes for less than in 2016.
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Melbourne development in the 2000s and 2010s far outstripped other cities, resulting in much greater housing supply. Picture: Sarah Matray
SuburbData analyst Jeremy Sheppard, commenting on oversupplied markets generally, said they could be good options for buyers “if all you care about is a roof over your head”.
He explained that they historically had poorer capital growth prospects, especially for those who bought off the plan as the new homes usually came with a premium well above established homes.
Mr Sheppard added that no market would remain suppressed forever and eventually they would catch up as the oversupply was absorbed, although this could take “many years”.
“If you are planning to live in the home many years, you can get better value … it’s different if you’re an investor and you care about capital growth,” he said.
Buyer’s agent Michelle May told The Daily Telegraph prior to the release of the PropTrack figures that those who purchased high-rise units needed to keep in mind the risks.
A home that lacked “scarcity value” would be harder to sell in a pinch as buyers would have their pick of comparable options. Ms May added that high-rise units often had higher strata fees.
Here are the suburbs where median unit prices are currently lower than or close to their 2016 levels in the affected states:
NEW SOUTH WALES
NSW suburbs experiencing prices close to or below 2016 levels were Sydney’s high-density development corridors in the inner south, Parramatta, and the Ryde region.
Multiple units in this building in North Ryde have been selling for less than the prices paid in the mid-2010s.
Haymarket units recorded one of the most significant price contractions. The current median price is $936,000, down from $1.23m a decade ago.
Units in nearby Chippendale units are currently trading at $752,500, an average of roughly $110,000 cheaper than in 2016.
The 10-year fall averaged about $5000 in Ultimo, while in Zetland and Mascot prices are currently about $6000-$8000 higher than in 2016.
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There were also several suburbs in the Parramatta region and further west where prices were about $20,000-$50,000 cheaper now than in 2016.
These suburbs included Harris Park, the Parramatta CBD, Rosehill, Auburn, Guildford and Ermington.
Recent prices have also been similar to 2016 levels in this North Ryde building near Delhi Rd.
Housing shortages, coupled with strong demand at auctions, have persisted in most of the rest of the market and Australia as a whole is not building enough to contain population growth. Picture: Sam Ruttyn
North Ryde units are currently $760,000, below the $839,000 recorded a decade ago. Prices in nearby Meadowbank and Epping were also cheaper today than in 2016.
In the Hills District, Rouse Hill ($672,500) and Kellyville ($792,500) were trading below their 10-year medians of $759,000 and $815,000 respectively.
In the inner west, Mortlake has seen prices dip to $825,000 from $912,500 in 2016. There was a similar 10-year drop in unit prices in Sydney Olympic Park and Homebush.
VICTORIA
The Victorian suburbs on this list are primarily located in inner Melbourne.
Inner suburb Armadale recorded a steep decline, with current median unit prices at $641,500, down from $860,000 10 years ago.
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Areas such as Melbourne’s Southbank and Docklands had extensive high-rise development that increased the supply of units.
Other suburbs where units are trading at close to their 2016 medians, or in some cases below the 2016 prices, were Parkville, Essendon North, Ascot Vale, West Melbourne, Travancore and Abbotsford.
Unit prices falls were rarer in Melbourne’s east and south. Balwyn units are currently $790,000, cheaper than the $845,500 median recorded in 2016.
Prices in Murrumbeena and Box Hill are also trading below their median from 10 years ago.
Apartment prices in Caulfield North and Cranbourne South were effectively level with those reported in 2016.
NORTHERN TERRITORY
Darwin had some of the starkest price drops, reflecting the more volatile and seasonal nature of the NT market.
Fannie Bay unit prices dropped significantly to $480,000, down from $650,000 in 2016.
Parap units were an average of about $140,000 cheaper than 10 years ago and in Nightcliff the average price difference was about $120,000.
Unit development in Darwin has kept a lid on price rises.
Prices in Stuart Park ($449,000) and Larrakeyah ($415,000) were both trading below their 2016 levels of $518,760 and $460,000 respectively.
Lyons apartments were marginally cheaper at $785,000 compared to $795,000 in 2016.
Suburbs such as Alawa, Humpty Doo, Rosebery, and Tiwi have remained very close to their 2016 prices, showing only a minimal 0.1 per cent average annual increase.
QUEENSLAND
Only one suburb in Queensland had prices cheaper than 2016 levels – South Townsville, where significant unit development has transformed the area into a high-density residential area.
The current median price of units in the suburb is $450,000, down from $462,500 in 2016.
South Townsville was heavily developed following upgrades to port facilities.
It should be noted that prices have been growing in recent years and are about 50 per cent higher than they were in 2021, suggesting a lot of what was once oversupply is being absorbed.
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