Sales hotspots point to resurgence in property prices into 2024

A dramatic resurgence in the property market over the past few months is pointing towards a price resurgence for the rest of 2023 and into 2024.

Sales hotspots reveal that seven out of ten property markets around Australia now have positive sales trend activity.

Investors and upsizers are being drawn back to the market as interest rate hike fears subside and families look to utilise savings and equity buffers built up during the pandemic’s spending hiatus.

Hotspotting General Manager Tim Graham said some of the market turnarounds had been dramatic, with the City of Sydney leading the way.

“The recovery signs we noted six months ago, and more strongly three months ago, have strengthened further – and now Sydney is Australia’s strongest market,” Mr Graham said.

“Some 80 per cent of suburbs there have positive sales trends, which is the best percentage in the nation.”

The revival is widespread across all sectors, with units notably to the fore.

Hotspotting Director Terry Ryder said Perth has been the nation’s strongest market for the past year, with the Western Australian capital continuing to thrive.

“The cheaper markets are the strongest, while the middle markets and the inner-city are also attracting solid demand,” he said.

“The turnaround in the Melbourne market has been quite dramatic.

“Three months ago, we reported a glimmer of recovery but overall Greater Melbourne was still struggling market.

“Now the city’s markets are pumping, with 73 per cent of suburbs recording positive activity.”

Mr Graham said it has been a similar story in Brisbane, which has come charging back over the past quarter, when it was classified as having its weakest market in some eight years, but now is on the busiest in the nation.

“The Adelaide market also continues to distinguish itself for its consistency of solid market performance,” Mr Graham said.

Apartments on the rise

Mr Ryder said the rise of apartments as the dwelling of choice for more and more buyers is undeniable.

“In several of our capital cities, the strongest market precincts are the inner-city areas where apartments dominate,” Mr Ryder said.

“The number one municipality in Greater Melbourne is the City of Melbourne, and the City of Sydney has similar status in the Greater Sydney market in this Spring survey.

Over the next 12 months, the competition in these markets is expected to ramp up, with upward pressure being driven by renters and home buyers.

- Darren Ventor, co-founder, DIYBA, on his three national hotspots for investors

Mr Ryder said the City of Hobart leads the market in the Tasmanian capital, while the Brisbane inner precinct is a stand-out in the Queensland capital, and inner Perth is among the strong markets in the WA capital.

“Lifestyle and affordability are the core drivers of this compelling national trend,” Mr Ryder said.

Top 10 hotspots for property upsizers

While apartments attract buyer attention, new research has revealed the top suburbs for those upsizers seeking more space.

The Property Credit findings, based on 13 criteria relating to specific property features combined with broader suburb variables, found that Perth accounted for six of the top 15 suburbs for city dwellers contemplating a more spacious abode.

Also with three suburbs in the top 10 was Canberra, an often-overlooked investor option.

Source: Property Credit.

The lists assigned a score out of 100 based on maximising investment potential and lifestyle.

In Sydney, Berowra Heights and Hornsby Heights stand out in the top 20 with suburb scores of 77 and starting budgets that offer exceptional value.

For Melbourne upsizers, Eltham North is the go-to suburb with a starting budget of $1,150,000 and a commendable suburb score of 77. It was the only Victorian suburb in the top 20, while Lysterfield also scored a 75.

Residing outside the top 20 but with scores above 75 were Sydney’s Kareela and Barden Ridge.

Queensland’s top three were Tarragindi, Mount Crosby and Seventeen Mile Rocks.

Regional hotspots

Other hotspotting research, this time conducted by online property investing portal DIYBA, singled out three local council areas for their investor potential, two of which were in regional areas.

Focusing on potential capital growth and rental yields, the research singled Kwinana Council in southern Perth, and regional centres Rockhampton Regional Council in Queensland and Gawler Council in South Australia.

The City of Kwinana is known as a coastal heavy and light industrial economic powerhouse of the Western Australian economy, with its more inland residential component incorporating leafy suburbs such as Orelia, Medina, Calista, Parmelia and Leda. Median rents have risen from around $300 to $500 since late 2018.

Like Kwinana, Rockhampton was seen as having strong capital growth prospects and delivered high rental yields. Suburbs such as Wandal, The Range, Park Avenue and Kawana have seen property prices and rents soar in the past five years.

Town of Gawler, north of Adelaide with suburbs such as Willaston, Gawler West, East and South, and Evanston, hasn’t delivered the same level of rent hikes as the previous hotspots but its capital growth since mid 2018 has been exceptional.

DIYBA co-founder, Darren Venter, said population growth was a key factor in their continued potential for investors.

“Specific pockets and suburbs within these council areas in particular are expected to rise in capital growth and/or cashflow due to an increasing population driven by affordability and the assistance of economic growth from employment, and the need to house the new and expanding population.

“Investors and home buyers will be attracted to the low, if any, holding cost of the properties in these markets.

“Over the next 12 months, the competition in these markets is expected to ramp up, with upward pressure being driven by renters and home buyers.”