Where Did Prices Rise The Most In 2023?

Affordable suburbs with median house prices below $500,000 dominated the best areas for price growth across Australia last year.

CoreLogic’s annual Best of the Best report shows that buyers competed strongly for affordable homes in lower-priced markets amid high interest rates. Perth suburbs dominated the best growth areas nationally, with 30% gains in Brookdale, Armadale and Hilbert.

The opportunity for people now working from home to leave the expensive cities and relocate to cheaper capital cities and regions likely played a role in strong buying demand in Australia’s more affordable suburbs.

The fact that Perth (15.6% growth in house prices) and Brisbane (13.3%) recorded stronger growth than Sydney (12.5%) and Melbourne (3.8%) demonstrates this trend. Perth is long overdue for growth and Brisbane is the most affordable capital city for East Coast buyers.

We’re also seeing more investors buying in areas well away from where they live to capture better yields and potentially more capital growth on a lower budget backed by smaller loans.

Another noticeable trend in 2023 was strong price growth in prestige suburbs. Nationally, two prestige suburbs were among the top areas for house price rises. They were Whitlam in Canberra with 29.1% growth and Bayview in Sydney with 25.3% growth.

This is reflective of strong ongoing demand in the $5 million-plus segment of the market. That’s being powered by wealthy families acquiring trophy residences or buying for their children, or grandchildren. Rising interest rates don’t impact these buyers, who are typically purchasing with cash. I think this part of the market will remain very strong in 2024.

Let’s take a look at the suburbs that recorded the best house price growth along the East Coast of Australia last year.

Top 10 growth suburbs of the East Coast capital cities

Whitlam, Canberra (up 29.1% to $1,158,983)

Bayview, Sydney (up 25.3% to $3,123,777)

Bellevue Hill, Sydney (up 24.9% to $9,731,177)

MacGregor, Brisbane (up 24.7% to $1,176,284)

Coopers Plains, Brisbane (up 24.6% to $946,069)

Canterbury, Sydney (up 23.5% to $1,728,346)

Salisbury, Brisbane (up 23% to $1,024,724)

Wishart, Brisbane (up 22.9% to $1,297,882)

Eight Mile Plains, Brisbane (up 22.8% to $1,300,767)

Hurlstone Park, Sydney (up 22.6% to $2,080,063) and Ascot, Brisbane (up 22.6% to $2,462,657)

Top 10 growth suburbs of the East Coast regions

Tralee, NSW (up 34.2% to $782,764)

Mount Morgan, Queensland (up 22.8% to $198,636)

Barraba, NSW (up 21.2% to $258,652)

Gundagai, NSW (up 17.9% to $406,614)

West Wyalong, NSW (up 17.6% to $301,559)

Gilston, Queensland (up 17.4% to $1,074,328)

Rosemount, Queensland (up 17% to $1,247,260)

Blackwater, Queensland (up 17% to $184,070)

Gilgandra, NSW (up 16.8% to $214,936)

Mount Perry, Queensland (up 16.5% to $260,167)

It seems we’re probably going to see interest rate cuts in 2024, but not until later in the year.

Every cut – usually 0.25% at a time – is helpful to existing homeowners in managing much higher loan repayments these days in the middle of a cost-of-living crisis caused by inflation.

But the Reserve Bank is likely to go slow with rate cuts, and I sense the first one or two cuts won’t make a material difference to borrowing capacities. This along with the pressure to lower migration this year may mean a bit less demand and more moderate price growth, especially if supply increases.