John McGrath – The most resilient markets of 2022
Despite eight interest rate rises worth a collective 3%, plus inflation significantly eating into household budgets, house prices in some Australian suburbs still grew in value last year.
CoreLogic’s annual Best of the Best report reveals the suburbs with the highest house price growth in both metro and regional locations during 2022. It perfectly illustrates the fact that Australia is made up of a large number of micro-markets.
While most of the country’s markets are in a correction today, due to macroeconomic trends like rising home loan rates, some are still going strong because of local factors and continuing COVID-19 trends.
Generally speaking, CoreLogic’s report shows the pace of growth was much lower in the top-performing capital city suburbs. But in the regional areas, house price growth continued strongly in many locations as people continued to relocate away from the cities.
As discussed in our McGrath Report 2023, regional relocators are now widening their search beyond the traditionally favoured seachange/coastal areas to rural areas as well.
The top three suburbs in regional Victoria in 2022 were in Shepparton, Bendigo, and Hume. The top three in regional NSW were in the New England and Riverina areas. The top three in regional Queensland were in Wide Bay and the Darling Downs districts.
Another COVID-19 trend that continued in 2022 was the decentralisation of families from the more expensive inner city areas in our capitals to the city outskirts because more people are working from home. So, they don’t mind the occasional long commute to their city head office in exchange for a larger, more affordable family home on the suburban fringes.
The data reflects these trends. Sydney’s top three performing suburbs were in the affordable south-west area. Brisbane’s top three were in the Logan and Ipswich districts. Melbourne’s top performers were Melton, Brookfield and Darley in the city’s north-west.
Down in Hobart, where house prices have climbed exponentially for several years, growth also slowed down in 2022. However, in Launceston, price growth was still very strong. Seven out of the top 10 Tasmanian regional markets were in Launceston and its surrounds.
Here are the East Coast suburbs with the greatest house price growth in 2022.
- St Johns Park 8.4% (Median price $998,344)
- Bonnyrigg Heights 6.7% ($944,069)
- Bonnyrigg 6.6% ($865,893)
- Bingara, New England and North West 36.2% (Median price $279,257)
- Gobbagombalin, Riverina 33.5% ($766,285)
- Lockhart, Riverina 33.3% ($286,752)
- Melton 4.1% (Median price $491,682)
- Darley 3.6% ($734,375)
- Brookfield 3.6% ($594,147)
- Rochester, Shepparton 25.2% (Median price $425,975)
- Kyneton, Bendigo 18.1% ($948,996)
- Bright, Hume 17.5% ($1,145,664)
- Yarrabilba 24.4% (Median price $595,396)
- Fernvale 24.1% ($540,989)
- Kairabah 23.8% ($623,951)
- Gin Gin, Wide Bay 33.5% (Median price $286,518)
- Miles, Darling Downs–Maranoa 31.3% ($209,569)
- Yarraman, Darling Downs–Maranoa 29% ($280,559)
- Coombs 8.9% (Median price $1,017,551)
- Denman Prospect 7.8% ($1,042,276)
- Throsby 6.1% ($1,156,264)
- Sandford 8.8% (Median price $1,213,733)
- Taroona 6.7% ($1,050,278)
- Brighton 3.8% ($587,995)
- Evandale, Launceston and North East 24.4% (Median price $585,199)
- Stieglitz, Launceston and North East 21.2% ($548,487)
- St Helens, Launceston and North East 18.7% ($595,893)
Source: Best of the Best 2022, CoreLogic
There will be good opportunities for buyers this year, especially in the more expensive areas where values fell the most in 2022. But in many suburbs, a lack of stock is stabilising the market already and putting a floor under prices. I see the next six months as prime buying time for purchasers across Australia before interest rates settle and prices start to move again.