The number of people searching for properties has more than doubled in some suburbs in the past year, and home prices could jump next.
The latest PropTrack data shows buyers have become increasingly active in the market, with the number searches rising across most suburbs.
The increase in search activity follows improving conditions in the property market, with three interest rate cuts so far this year lifting borrowing capacities and boosting confidence.
REA Group senior economist Eleanor Creagh said lower interest rates had attracted more buyers back into the property market compared to a year ago.
“Housing demand has been rebuilding with this year’s series of interest rate cuts,” she said.
“Lower interest rates have boosted borrowing power and confidence, re-engaging would-be buyers who had stepped back when rates peaked.”
“Population growth and tight rental markets are also funnelling more households into the buyer journey.”
Mackenzie was the Brisbane suburb where searches rose most in the past year. Picture: realestate.com.au/sold
An increase in searches could lead to to price growth, although this wasn’t a hard and fast rule, Ms Creagh said.
“In the demand funnel, search intensity typically leads enquiry, inspections and lastly sales,” she said.
“Where supply is slow to respond, sustained search growth often precedes shorter days on market, higher clearance rates and then price gains.”
Where buyer searches have surged the most
There were 70 suburbs where searches have more than doubled compared to a year ago, with one key common factor.
The suburbs with the biggest increase in searches compared to a year ago were mostly found in major centres across NSW and Victoria where property prices were relatively affordable, including Wagga Wagga, Bendigo, Ballarat and Newcastle.
Regional Australia has been on the radar for property investors, who have been eagerly snapping up properties in areas with high rental yields and strong growth prospects.
Investors have become increasingly active in the market overall, with the recent PropTrack Terri Scheer Investor Report finding investor lending is at levels not seen since 2017.
Buyer searches have exploded in affordable suburbs of regional cities such as Wagga Wagga. Picture: Getty
Ms Creagh said interest rate cuts and tight rental markets had enticed many investors to transact.
“In regional centres, investors are attracted to university, defence, health and agribusiness hubs with resilient rental demand and better yields than capitals,” she said.
The growing interest in regional centres comes off the back of slowing price growth in Perth, Adelaide and Brisbane – the hottest capital city markets of the past few years, where interstate investors contributed to a huge run-up in prices recently.
Other buyers, including those buying their first home, were attracted to the relative affordability and better bang for buck in the regions, where median prices could be 30-60% below that of a capital city, Ms Creagh said.
Five of the top 10 suburbs with the biggest increase in searches were in Wagga Wagga, a city with a population of about 68,000, roughly halfway between Sydney and Melbourne and three hours west of Canberra.
Investors have been drawn to low-maintenance homes with high rental return in regional cities, including Wagga Wagga and Bendigo. Picture: realestate.com.au/sold
Searches increased almost six-fold in the Wagga Wagga suburbs of Glenfield Park and Mount Austin, while there were more than three times as many searches in Kooringal, Estella and Ashmont.
Real estate agent and Professionals Wagga Wagga director Paul Irvine said investors were flocking to these suburbs, including many who were purchasing through their superannuation funds.
“The investor market would be 90% of the sales in Glenfield Park in the past six months,” he said.
“They’re loving Glenfield Park because of the rental return, the age and the price point.”
Searches also surged in the Bendigo suburbs of Sailors Gully, California Gully and Jackass Flat.
Most properties in these suburbs were being purchased by investors working with buyer's agents, according to real estate agent and Bell Property Bendigo Castlemaine Maldon principal Tim Noonan.
“Usually the clients are from Sydney and Brisbane,” he said. “They see that Victoria has lost pace, that Bendigo is affordable and they're predicting it will go up a fair bit.”
Suburbs of Bendigo topped the list for increase in searches in Victoria. Picture: Getty
He said the surge in interest from interstate investors was keeping some first-home buyers out of the market.
“The buyer's agents are starting to push the prices up, so the first-home buyers are finding it hard,” he said.
The outer Newcastle suburbs of Holmesville, Barnsley and Shortland had about twice as many searches as a year ago.
Searches in many Darwin suburbs have doubled, fuelled by investor demand, while almost twice as many buyers were searching in affordable Tasmanian suburbs such as Queenstown, where the median house price is $180,000.
City buyers seeking bang for buck
In the capitals, searches tended to increase most in the outer suburbs, driven by both rising investor interest and increased incentives for first-home buyers.
First-home buyers’ purchasing power has been given a boost thanks to the federal government’s expanded First Home Guarantee, which allows buyers to purchase with a deposit as low as 5% of the property value.
Ms Creagh said each extra dollar of borrowing power stretched further on the city fringe, where homes were more affordable, making outer suburbs an appealing option for buyers who prioritise space but have tighter budgets.
The tree-change dream is still very much alive, with searches surging in East Kurrajong on Sydney's outskirts. Picture: realestate.com.au
In Sydney, searches rose most for houses in East Kurrajong, with several other western Sydney suburbs recording big jumps, including Claymore and Menangle Park, while Fairfield Heights and South Granville had big increases in searches for units.
With strong rental yields and affordable property prices that are trending upwards, investors have been eagerly snapping up properties in outer suburbs to take advantage of projected price growth.
In Melbourne, there were more buyers searching for houses in suburbs in the northwest including Albanvale, Campbellfield, Coolaroo and Westmeadows – more-affordable suburbs on the radar for property investors looking to capitalise on Melbourne’s home price recovery.
Investors are swooping on Melbourne's northern suburbs such as Coolaroo, targeting affordable properties with strong rental returns. Picture: realestate.com.au/sold
Prices in Melbourne have been rising this year after several years of underperformance relative to the other capitals, with the city’s median house price now at a record high.
Strong buyer activity signals prices could rise higher
While buyer searches have been increasing, a limited supply of properties on the market is helping to keep prices elevated.
The total number of homes on the market in September was about 8% lower than a year ago, with listings down across both the capitals and regional areas, according to the latest REA Group Listings Report.
Sunnybank Hills was one of several southern Brisbane suburbs where property searches are trending higher. Picture: realestate.com.au/sold
Ms Creagh said home prices were expected to lift as a result of increasing demand and tight supply.
“With stock still constrained, and more buyers back in the market, competition is heating up and prices look set to push higher through spring,” she said.
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