Despite a cascade of major economic developments, home values in most suburbs are still higher than this time last year.
The latest PropTrack data shows that prices in most Australian suburbs have kept growing over the past 12 months, even amid mounting property market headwinds.
Since this time last year, interest rates were cut once and then raised thrice, see-sawing buyers’ borrowing power and rattling market sentiment.
A global energy crisis and resurging inflation have also provided an unsettling backdrop for buyers and sellers navigating a property market in flux.
But the biggest change that rocked the market came in the form of the abolition of negative gearing for established homes and the reduction to the capital gains tax discount announced in the budget in May.
Suburbs with affordably-priced houses had some of the biggest price gains in the past year, including Mayfield in Tasmania where this three-bedroom house sold for $492,500 in March. Picture: realestate.com.au/sold
The reforms dented demand from investors, whose participation in the property market had surged to record levels over the past few years, helping to push prices to record highs across the country.
However, despite prices pulling back from those elevated levels in many markets, data tracking changes in property values shows prices are still higher than a year ago in most suburbs.
PropTrack data shows house prices rose in 85% of Australian suburbs in the past 12 months, while unit prices rose in 90% of suburbs.
Of the suburbs where prices fell, about half recorded declines of less than 3%.
Jump ahead to see:
- Where prices have gone up the most
- Where buyer demand is highest
- Where properties are selling quickest
Examining home price changes, the level of buyer demand and how long it takes homes to sell has uncovered pockets of resilience within Australia’s changing property market.
The data highlights which areas may hold up best amid the shifting landscape, and places potentially susceptible to further price weakness.
Suburbs with strongest price growth were typically found in more-affordable parts of the country, with regional Australia largely outperforming the capitals.
Huge price jumps have been recorded in the past year in affordable suburbs across regional Queensland, Western Australia and Tasmania, defying the downturns recently seen in the capitals.
REA Group senior economist Anne Flaherty said regional areas had broadly outperformed the capitals in the past few months.
“In June we saw prices down in every capital city except Darwin, but in the regional markets prices actually stayed steady at record highs in most places around the country,” she said.
“Comparing year-on-year growth, regions are well ahead of where capital cities are.”
Where prices have gone up the most
Regional centres and outer suburban areas have been the standout markets for price growth, even after recent tax changes shook the market.
Huge growth figures were recorded in the past year in several suburbs where an influx of out-of-area demand caused prices to jump rapidly.
The data uses PropTrack’s automated valuation model (AVM) to determine the median property value and annual price growth for each suburb.
Ms Flaherty said the relative affordability of many of Australia’s top suburbs for price growth had enabled prices to rise so dramatically in response to increased demand from first-home buyers and investors.
“When the median price is lower, there is more space for growth, so buyers can absorb that growth more easily,” she said.
However, areas that had big price rises due to an explosion in investor demand could quickly come back down to earth as investors retreat from the market.
“Suburbs that are most popular with investors or have a higher concentration of investors are the strongest candidates for price falls,” Ms Flaherty said.
“Now that we have tax settings that disincentivise investing, we’re likely to see less buyer demand in those areas, and so potentially larger price drops.”
Interstate investors and first-home buyers have competed fiercely in affordable Launceston suburbs such as Ravenswood, pushing prices to record highs. Picture: realestate.com.au/sold
Affordable suburbs of Launceston such as Ravenswood, Waverley and Mayfield had some of the strongest price growth nationally, with house values up about 40% compared to a year ago.
Launceston real estate agent and Town & Country Real Estate director Kyle Barrett said the big jump in prices came as a result of a supply shortage in the face of surging investor and first-home buyer demand at the affordable end of the market.
“As a state, and certainly in our northern Tasmanian market, we’re not building enough affordable entry-level homes,” he said.
Mr Barrett said there had been a reduction in investor demand since the federal budget, particularly among investors buying with self-managed superannuation funds.
But first-home buyers who had missed out on purchasing a property in the past six months were becoming more active as investor demand dropped off.
“Things are still travelling positively, it just isn't as it was from a buyer volume perspective,” Mr Barrett said.
Not every suburb where house prices exploded was affordable - values in Quindalup near Bunbury in Western Australia jumped 33% in the past year to a median of $2.15 million. Picture: realestate.com.au/sold.
In Western Australia, affordable suburbs of Geraldton, Bunbury, Busselton and Albany had the largest price increases, with some suburbs recording jumps of more than 30% in a year.
Regional Victorian towns and suburbs where houses are typically priced at less than $600,000, such as Morwell, Mildura and suburbs of Bendigo, had annual growth rates exceeding 20%, contrasting with a price decline of almost 2% in Melbourne overall in the past year.
It was a similar story in New South Wales, where suburbs of Albury and Wagga Wagga remain price growth leaders while Sydney prices remained largely flat overall.
Ashmont is one of several affordable suburbs of Wagga Wagga where home prices jumped in the past year. This three-bedroom house in Ashmont sold for $650,000 in April. Picture: realestate.com.au/sold
Real estate agent Ryan Smith of PRD Wagga Wagga said the intense competition between investors and owner-occupiers that drove up prices in affordable suburbs such as Ashmont, Mount Austin and Tolland had eased recently.
But that had allowed first-home buyers to seize the opportunity to enter the market under more favourable conditions.
“This is some of their best buying,” Mr Smith said. “They’re getting a very good product and not having to compete with six or seven offers; they’re only competing with one or two.”
The sharpest unit price increases were mostly in traditionally affordable, outer areas of the capitals, particularly in Brisbane’s south where prices soared in suburbs such as Beenleigh and Slacks Creek.
Local real estate agent Rebecca Shortall of Harcourts Property Centre said the number of active investors had declined since the budget, but first-home buyers were becoming increasingly confident.
“Last weekend was the busiest we’ve seen in the past eight weeks,” she said.
“Buyer enquiry has picked up, especially for townhouses that are move-in ready and present really well. They’re the ones buyers are jumping on.”
Where buyer demand is highest
Tracking the number of key enquiries per listing — which combines high-intent actions such as emailing an enquiry, calling the agent or downloading documents — can reveal how in-demand a suburb is with serious buyers who are ready to purchase a property.
Many suburbs with very high enquiry levels were relatively affordable, such as western Sydney suburbs St Marys and Bidwill, and southern Brisbane suburbs such as Rochedale South.
Others such as Wembley in Perth are among the priciest in their local markets.
Ms Flaherty said prices could remain stable in areas that had strong underlying demand, especially in relatively affordable markets.
Wembley in Perth's west, where the median house price is about $2 million, is one of the city's most sought-after suburbs, based on the level of buyer enquiry. Picture: realestate.com.au/sold
“The areas that see the highest number of enquiries are the ones that are going to be the most price resilient,” she said.
“Even if we see more buyers are hesitant and more people pull out of buying, you're still leaving quite a higher number of people, so that maintains competitive conditions in those markets.”
Where properties are selling quickest
The time it takes to sell a home is another measure that can reveal how much demand there is for homes at the local level.
Homes in Darwin suburbs such as Gray and Wanguri saw the fewest days on market recently – a result of boom conditions seen in the NT capital over the past year.
Ms Flaherty said demand had exceeded supply in Darwin, and while investors had been very active recently, owner-occupier demand had increased too.
“Darwin is the second-strongest growing capital city year on year and was the only capital city to see home prices still rise in June,” she said.
“Population growth in Darwin has been exceeding the rate of new housing delivery in recent years and that’s keeping conditions competitive.”
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Investors have been very active in Darwin recently, but price growth wasn’t just driven by a spike in investor demand, with owner-occupier demand increasing too, Ms Flaherty said.
The city’s affordable price point and high yields would keep many investors engaged in the market, she said.
“Because the rents are so high relative to the value of the property, the kind of investor who is attracted to the Darwin market is not going to be as affected as investors who buy elsewhere on lower yields."
In Darwin suburbs such as Gray, where the median house price is $620,000, homes have typically been selling in less than two weeks. Picture: realestate.com.au/sold
Elsewhere, homes sold rapidly in pockets of Melbourne’s outer southeast, Brisbane’s west, Adelaide’s south, and Newcastle.
Less time on market could mean large numbers of buyers were searching in the area relative to the number of homes coming to the market, Ms Flaherty said.
“Sometimes certain suburbs might be more tightly held or it's rare for properties to come up for sale, so when they do come up for sale they can get snapped up very quickly."
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