John McGrath – Suburbs leading the rebound
The rebound in property markets across Australia is continuing, with new CoreLogic data showing 35% of Australian suburbs experienced home price growth in the March quarter.
This is up quite substantially on the 19% recorded in the December quarter.
There’s also new trend emerging in the rebound that we haven’t seen before, and that is the prevalence of highly affordable regional markets with very low median home values experiencing the biggest bounce in home prices.
Traditionally in a recovering market, we see prestige suburbs in the capital cities taking the lead, as buyers seek out newly available value in highly prized areas following a downturn.
These types of markets are definitely in demand during this rebound too, but the dominance of very affordable regional areas is an unusual trend and could reflect a number of factors.
Here are the top 10 suburbs on the East Coast for dwelling value growth over the March quarter.
Top areas for price growth in the March quarter (East Coast)
- Dinner Plain in Hume in regional Victoria, up 8% to a median home value of $1,052,121
- Trangie in the far west of regional NSW, up 7.4% to $228,371
- Werris Creek in the New England area of regional NSW, up 7.1% to $275,274
- East Killara on Sydney's lower north shore, up 6.8% to $3,483,271
- Port Douglas in Cairns, North Queensland, up 6.6% to $496,823
- Middle Cove on Sydney's lower north shore, up 6.4% to $3,353,226
- Warrawee on Sydney's upper north shore, up 6.4% to $2,439,941
- South Turramurra on Sydney's upper north shore, up 6.2% to $2,309,828
- Gordon on Sydney's upper north shore, up 6% to $1,494,820
- Armstrong Beach in the Mackay-Whitsunday region, up 5.7% to $419,357
As you can see, there’s a mix of small, affordable regional towns and prestige Sydney markets.
Some of these regional towns appear to be ‘bridesmaid suburbs’ now experiencing a spill over effect in demand. The pandemic prompted many people to leave the cities and head to popular regional towns for a lifestyle change. This raised home values, and now we are seeing buyer demand spread out around these hot spots to bridesmaid suburbs, as people sacrifice proximity for value.
For example, Dinner Plain in the Victorian Alps is 13km from Mount Hotham. It offers more value than the more expensive central suburbs surrounding the popular ski resort town.
Another example is Werris Creek, which is about a 35-minute drive south of Tamworth. Houses there are at least $100,000 cheaper than in the most affordable parts of Tamworth.
Some of the high-growth suburbs are small beachside locations where people are finding exceptional value, such as Armstrong Beach in the Mackay-Whitsunday region of Queensland.
Finally, a word on the five prestige markets in Sydney’s lower and upper north shore areas.
Some of the most desirable secondary schools in Australia are located there, so it’s not surprising to see buyers competing fiercely to upgrade into these catchment zones following the downturn.