Suburbs that are considered not likely to perform well are surprisingly doing so, this according to new data released by realestate.com.au. These suburbs are growing against all odds, with the Australian property markets either flat or sluggish.
Over the last year, seven of the top 10 capital growth markets (areas with the greatest change in median price), have reported significant growth in value while at the same time not reporting increase in sales or decrease in sales. In fact, some are reporting as much as 50% less sales. The decline in sales activity is one of the factors driving growth in these suburbs.
Melbourne and Sydney
Sydney is experiencing the most difficulty, with the falls in demand echoing those experienced in Perth following the collapse of the mining boom. The drops are projected to continue.
The Property Outlook Report released by realestate.com.au says that Sydney’s median house price had declined by 2.4% in the March 2018 quarter, compared to same year-ago period.
So, it’s probably a surprise then, that the country’s top growth suburb at present is the beachside suburb of Killcare Heights on the NSW Central Coast. In the same period in 2017, the median property value in the area was $859,500. At present, it’s $1,305,000, up 51%, with 23% fewer properties sold.
This came as no surprise as the Central Coast had been popular on realestate.com.au for years now. It became the alternative to Sydney, where property had become unaffordable. Killcare Heights is near the beach, which is what most people in Sydney prefer, it is much more affordable than Sydney and it is commuting distance from Sydney.
Also included in the top 10 highest growth suburbs are the NSW suburbs of Bilpin, in the Blue Mountain and Rossmore in the outer west. Being situated in Sydney’s growth corridor, Rossmore benefits from a shifting property market from low density to higher densities.
Meanwhile, the median prices in some suburbs had levelled in Melbourne, but surprisingly, suburbs like Research (No. 2 on the list) and Plenty (No 6 on the list) posted median price increases of 50.4% and 43.9%, respectively.
The two suburbs are in the city’s leafy outer northeastern ring, not far from Warrandyte, which is presently the country’s No. 1 in-demand suburb. Properties in the outer north east are affordable, even the large homes and large blocks.
South Australia and Tasmania
Meanwhile, some of the top growing suburbs are in Australia’s bullish markets. Tasmania was listed the No. 4 highest growing suburb, the beautiful town of Richmond, easily 20 minutes from the Hobart CBD. In 2017, the median price in the area was $380,000 but it is now at $552,000, up 45.3%.
In the bayside, blue-chip suburb of Glenelg South in Adelaide, the median price reached the million dollar mark. It also ranked the No. 5 highest growing suburb (a rise of 45.2%). In contrast with other suburbs, it reported a notable rise in sales action, with a 43.8% increase in properties sold.
Tasmania is currently popular, with so many buyers and people looking to rent. This is can largely be attributed to jobs growth and a changing economy. Adelaide looks to be drawing in many investors, especially those from Melbourne and Sydney, and this would also be a major driver for growth.
So what about Newcastle?
I’m seeing more property price reductions, more and more properties with no advertised price (which often suggests the seller is wanting more than the appraised price) and more properties lingering on the market for much longer than the average days on market last year. Buyers are definitely more guarded on price and less reluctant to snap up property. They are prepared to research longer, they are taking their time to buy ‘the right property’ and taking the time when negotiating, no longer entertaining the fear of loss.
Newcastle median house prices have dipped again in the last quarter, a “flattening out” that begun late 2017. According to a report from the Domain Group, Newcastle’s median house price fell 2.5 per cent. Despite the fall in Newcastle, the median price still amounted to a 13.3 per cent rise year-on-year for the same quarter in 2016. Median prices have risen about 40 per cent over the past four years and it will be interesting to see what happens for the remainder of the year!