Australia’s property market bolters revealed

Australia’s property market bolters revealed
January 23, 2019 Simon Pressley

Propertyology’s most recent research into every single market in Australia has identified the best performing property markets over the past three years. The results show that Australia has an embarrassment of investment opportunities, if only people were prepared to remove the blinkers.

If we believed everything we read in the media, seemingly there are only two property markets in the country – Sydney and Melbourne.

The truth of the matter is that Australia consists of 550 Local Government Authorities. These 550 LGAs are the property investor’s equivalent of the “stock exchange”. 139 of these LGAs are located in our 8 capital cities and the other 411 are throughout regional Australia.

From the Gold Coast (Australia’s 6th largest settlement, population circa 600,000) to dozens of smaller townships like Forbes – Australia’s 184th largest settlement, a population of 9,900 and an average annual median house price increase over the last 20 years of 5.6 per cent – there are a lot more property markets than most people realise.

The best-performing location in all of Australia over the last 3 years was Wyndham, in the outer-southwestern suburbs of Melbourne where the median house price increased by 46.8 per cent.

It’s important to note that Wyndham’s median house price is still affordable for most – even after that growth – and is now $565,000.

Regional wins the race

Aside from Melbourne and Hobart, it was large parts of regional Australia that produced the best-performed property markets on a cumulative value growth basis over the past three years.

In addition to the above-average capital growth, the significantly higher rental yields ranked approximately 50 regional towns and cities streets ahead of five or six capital cities.

And with Sydney and Melbourne entrenched in a downturn cycle, Propertyology fully expects many regional locations to leave capital cities in their dust over the next three years.

Already over the last 3 years, it was regional locations that lead the way with a strong representation in the top 20 out of 550 LGAs.

While Byron achieved price growth of 40.8 per cent, its median house price of $1 million makes it an anomaly for a regional market. With a population of 33,000 people, Byron is our 73rd largest township and Australia’s 2nd most expensive.

Perhaps it’s all those celebrities moving to Byron that has pushed up its price to a figure more reflective of Sydney!

Regional locations in New South Wales and Victoria featured strongly in the top 20 list, with Shoalhaven and Kiama in NSW recording median house price growth of 41 and 35 per cent respectively.

Baw Baw and Mitchell in Victoria both posted median house price increases of 38 per cent over the three-year period.

As you can imagine, NSW regional locations featured strongly as some of the best performing locations given their affordability compared to that State’s capital city.

Some of the top price performers were Tweed, Wollongong, Port Stephens, Newcastle and Lithgow with price growth of between 29 and 32 per cent.

Geelong in regional Victoria has staked its claim as one of the strongest markets in the land with median house prices up 31 per cent, with Colac not far behind on 26 per cent.

Strong interest from Victorian-based tourists was a big driver of Noosa – Queensland’s best-performed market for the last 3 years with a 30 per cent increase in median house prices.

Noosa’s price growth was actually better than 42 out of 43 LGAs which make up Greater-Sydney. Woollahra was Sydney’s best with 43 per cent growth and a median house price that now sits at $3.88m. Wanna buy one!

While the median house price in Brisbane city council produced cumulative growth of 10.5 per cent over the last 3 years, Sunshine Coat (17 per cent) and Gold Coast (14 per cent) were stronger.

In Tasmania, which is still having its rightful moment in the property sun, Launceston posted growth of 19 per cent over the last 3 years, but it’s important to recognise that almost all of that was in 2018.

In fact, Launceston is my short odds favourite to be Australia’s best market 2019.

Elsewhere in Tassie, Meander Valley and Devonport also posted solid gains in the 15 to 17 per cent vicinity.

Capital city results

When it comes to capital city performance over the past three years, Melbourne had 12 out of the top 20 LGAs however, it was areas with a $500,000 to $700,000 median house range that were the best.

Brimbank, Hume, Cardinia, Whittlesea, Frankston, Casey, Melton, Yarra Ranges, Dandenong, Mornington Peninsula all had between 36 and 46 per cent growth.

Hobart wasn’t far behind with 3 out of its 7 LGAs – Glenorchy, Hobart City and Kingborough – recording median house price growth of 36 to 41 per cent over three years. Add to that, 25 per cent increase in Hobart rents over the last 18 months (and climbing) and it’s easy to see which Australian city has produced the highest total return for investors.

Mosman and Waverley (Bondi) were among Sydney’s best however, their median house prices are not really an option for the majority of Australians, $3.9 million and $2.7 million respectively.

Canberra was Australia’s 4th best capital city with 16.1 per cent growth.

Adelaide posted some solid results with areas like Campbelltown and Burnside posting 15 per cent median house price increases.

As previously mentioned, the LGA of Brisbane saw 10.5 per cent growth while Logan (10 per cent) and Moreton Bay (8.2 per cent) also form part of Greater-Brisbane.

A few expensive municipalities in Perth recorded positive results, which is something at least, but Litchfield in Darwin posted a 5.1 per cent median house price fall in three years – ouch!

At the end of the day, Australia has a large land mass and its population lives in 550 different local government areas with individualised economies and property markets.

Why would anyone limit their property investment options to a handful of locations that might hog all the limelight but don’t make the cut when it comes to long-term market potential?

 

Propertyology is Australia’s premier property market analyst. Every capital city, every non-capital city, we analyse fundamentals in every market, every day. Our multi-award-winning buyer’s agents use this valuable research to help everyday to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.

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