Top 10 boom suburbs outstrip modest value growth elsewhere
The top ten suburbs for dwelling value increases over the past six months have recorded double digit growth, but the wider market is performing more modestly and faces significant headwinds in what could be a turbulent end to 2023.
Property prices have failed to go near keeping up with inflation nationally over the past six months but some areas have defied the modest national gains to record as much as a 14.4 per cent growth in median house values.
Sydney and Adelaide suburbs dominated the list of top ten houses for price growth, while Sydney stood alone with six of the top ten spots for units.
Property prices nationally have risen 2.3 per over the first six months of 2023, according to REA Group, but data released by PropTrack has revealed many suburbs have experienced far greater AVM (Automated Valuation Model) growth in that period.
National suburbs that have experienced the largest six-month growth in average House value:
| Rank | Suburb | Area (SA4) | Current median | Six-month % growth in AVM |
|---|---|---|---|---|
| 1 | Hurlstone Park | Sydney - Inner West | $2,037,000 | 14.4% |
| 2 | Fairlight | Sydney - Northern Beaches | $3,683,000 | 13.4% |
| 3 | Smithfield Plains | Adelaide - North | $378,000 | 13.1% |
| 4 | Kings Langley | Sydney - Blacktown | $1,417,000 | 13.1% |
| 5 | Biggenden | Wide Bay | $309,000 | 13.0% |
| 6 | Andrews Farm | Adelaide - North | $470,000 | 12.4% |
| 7 | Elizabeth North | Adelaide - North | $353,000 | 12.3% |
| 8 | Davoren Park | Adelaide - North | $360,000 | 12.3% |
| 9 | Brookdale | Perth - South East | $369,000 | 12.1% |
| 10 | Manly | Sydney - Northern Beaches | $4,667,000 | 12.1% |
The best performers for houses were quite evenly divided between higher-end prestige markets and lower priced, more affordable suburbs. Units were more likely to be well above median prices among the top ten best performers over six months.
Speaking to API Magazine, PropTrack Senior Economist Paul Ryan said the diversity that saw mid-priced suburbs largely omitted came down to the resurgence in high-priced Sydney markets and outer Adelaide suburbs.
“The suburbs that have shown the most significant price growth over the past six months highlight two broad factors affecting housing markets in 2023.
“Primarily, we witnessed a noteworthy resurgence in Sydney.
“Despite substantially higher interest rates, the economy and labour market remain strong, largely benefiting premium suburbs close to the CBD - many of which saw price falls last year.
“Secondly, the ongoing weight of demand for relatively more affordable capitals of Adelaide and Brisbane, in particular, the continued value in the north of Adelaide.”
Regional locations were also conspicuous by their very limited appearance in the two top ten lists.
National suburbs that have experienced the largest six-month growth in average Unit value:
| Rank | Suburb | Area (SA4) | Current median | Six-month % growth in AVM |
|---|---|---|---|---|
| 1 | Forest Lodge | Sydney - City and Inner South | $1,196,000 | 12.7% |
| 2 | Kirribilli | Sydney - North Sydney and Hornsby | $1,884,000 | 12.5% |
| 3 | Haymarket | Sydney - City and Inner South | $1,015,000 | 12.5% |
| 4 | Palm Cove | Cairns | $558,000 | 12.5% |
| 5 | Christie Downs | Adelaide - South | $460,000 | 11.9% |
| 6 | Millers Point | Sydney - City and Inner South | $1,840,000 | 11.8% |
| 7 | Point Piper | Sydney - Eastern Suburbs | $5,609,000 | 11.4% |
| 8 | Lavender Bay | Sydney - North Sydney and Hornsby | $1,395,000 | 11.2% |
| 9 | Brisbane City | Brisbane Inner City | $596,000 | 11.0% |
| 10 | Newcastle West | Newcastle and Lake Macquarie | $796,000 | 11.0% |
Property sales volumes may be about to rise
While some areas outperform the wider real estate market, previous interest rate hikes are still filtering through and impacting households.
The other great interest rate impact is set to be felt when around 880,000 fixed-rate mortgages expire this year, as well as another 450,000 in 2024.
Borrowers will be forcibly moved from loans acquired when rates were on the floor during Covid to variable rate loans at double or triple that level.
Herron Todd White’s Drew Hendrey, Executive Director, Valuation and Advisory, said things may move “quickly and dramatically”.
“There is an undercurrent of uncertainty among property owners at present,” he said.
“That’s part of the reason behind an unseasonable jump in residential listing numbers throughout June and July.
“It appears some owners who’d held off selling over the past year or so are now looking to capitalise on a more balanced market.
“My suspicion is we’ll continue to see additional properties hit the portals in coming months.
“Listing numbers may well amplify post-Christmas too.
“Consumer spending during the festive season combined with the full impact of rate rises to date will prompt many to rationalise their household finances in early 2024 and some will choose to sell down assets to help balance the books.”
Property owners were selling for a range of reasons, according to Tim McKibbin, CEO, Real Estate Institute of NSW.
“Whether it’s investors selling as the attractiveness of residential property as an investment is diminished, or people selling due to mortgage stress or before this stress becomes a reality, some of the recent activity in the market is being driven by consumers in difficult circumstances,” he said.
“Unfortunately, the number of downsizers listing their properties remains constrained by the huge impost of stamp duty, which for many rules out a move to a more suitable home.
“All the while, and even with the potential for further rate rises, prices continue to creep upwards.
“Spring will soon be upon us, so it will be interesting to see if the current price trajectory will be maintained with a further increase in listings.”
