Property prices double in some areas as national prices near 2022 peak
For a lucky few property owners their asset has doubled in value in just 12 months, while national real estate values overall are hurtling towards their previous peak from April 2022.
As property prices doubled in a year in a select few places, national property prices are on track to return to positive annual growth within a month.
At the real estate market’s current trajectory, it is on course to record positive 12-month growth by July and surpass their April 2022 peak by January 2024.
Eleanor Creagh, Senior Economist, PropTrack, said housing demand was being bolstered by escalating migration levels and renters trying to escape the rapidly rising rents at a time when there was a limited amount of stock on the market.
In the face of this population surge, new dwelling approvals are actually at ten-year lows.
The outcome of this mismatch between homes and people is so strong that not even rampant inflation and interest rates can dampen demand and price growth.
“That could see home prices lift by 4 per cent over 2023,” she said.
“The housing market has so far avoided the steep falls many expected.
“After five months of price growth, stronger market conditions are becoming more widespread in 2023.”
The price recovery is exemplified by the ten suburbs that have doubled in price over the past year.
Seven are in News South Wales and four of the ten are regional as well as one in Darwin.
Top 10 suburbs where house prices doubled the quickest relative to their median sales price - May 2023
|Suburb||GCCSA||Months to double||Start median||Median May 2023|
|1||Boat Harbour, NSW||Rest of NSW||16||$846,250||$1,707,500|
|2||Proston, QLD||Rest of QLD||20||$117,500||$235,000|
|3||Humpty Doo, NT||Greater Darwin||20||$300,000||$600,000|
|4||Nirimba Fields, NSW||Greater Sydney||20||$541,000||$1,130,100|
|5||Box Hill, NSW||Greater Sydney||21||$600,000||$1,225,000|
|6||Murrays Beach, NSW||Rest of NSW||22||$625,000||$1,250,000|
|7||Melonba, NSW||Greater Sydney||24||$544,950||$1,160,000|
|8||Wy Yung, VIC||Rest of VIC||24||$417,500||$840,000|
|9||Vineyard, NSW||Greater Sydney||24||$2,417,500||$5,000,000|
|10||Grantham Farm, NSW||Greater Sydney||25||$514,000||$1,050,000|
The lack of supply is highlighted by near absence of properties for sale in vast tracts of suburban and regional Australia.
Inner and south east Perth, Brisbane inner city, east and north, Darwin, Hobart, Sydney’s outer west, outer south west and Blue Mountains, Gold Coast and Melbourne south east are regions that have experienced an annual decline in listings of 80 to 90 per cent.
Property sellers and buyers in paralysis
While it may seem like this dearth of supply is good news for sellers, REIA President Hayden Groves said that’s not necessarily the case.
“While it’s causing a lot of pain for buyers, and people think it’s good for sellers, it’s hard for them both.
“Part of the reason we have such a blockage in supply is that sellers are reluctant to put their properties on the market as they can’t be sure they’ll find anything that’ll suit their needs to move into.
“In the past, they’d just rent for six to 12 months while they looked, but now, with the crisis in the rental market, that’s not really an option, either.”
The one cohort in the property market still keen to sell is the investor-owner.
Rising interest rates that are wiping out the benefits of higher rents, especially among those moving from fixed to higher variable rates, are driving many landlords to sell.
The portion of newly listed ex-rentals swelled to 30.3 per cent, which is 1 percentage point higher than a month ago and 5.2 percentage points higher than the long-term average.
The proportion of newly listed investor-owned residential listings is at a two-year high of 36 per cent in Sydney.
According to CoreLogic, investor-owned properties in Melbourne now account for 32.3 per cent of all new listings, the highest level in a year and 6.6 percentage points above the decade average.
In Brisbane, investor listings climbed to 33 per cent, which is 4.4 percentage points higher than the previous 10-year average, it increased to 34.4 per cent in Perth and to 35.8 per cent in Canberra.
As landlords abandon the market, the rental crisis is only set to worsen.
Affordability at GFC levels
Despite a decline in housing affordability, Western Australia remained the most affordable of all states and territories for home buyers and renters in the March 2023 quarter, according to the Real Estate Institute of WA (with the exception Northern Territory home buyers).
Nationally, the proportion of family income required to meet loan repayments was 44.9 per cent. This equalled the worst affordability result since the Global Financial Crisis (GFC) era of September 2008.
South Australia saw the greatest increase in loan servicing pressure over the quarter, up 1.1 percentage points to 41 per cent. New South Wales home owners faced the greatest affordability challenge, requiring 55 per cent of their income to service monthly mortgage repayments.
Tasmania and the ACT both recorded slight improvements in housing affordability.