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Australia’s Six Best Property Markets

Australia’s Six Best Property Markets
May 13, 2022 Propertyology Head of Research and REIA Hall of Famer, Simon Pressley

From 8 capital cities and 200 regional cities / towns each with a population of 10,000 people or more… here are the six (6) best-performed property markets in Australia over the last 5-years.

Each of the best 6 out of 200+ locations produced more than a 100 percent increase in their median house price.

The characteristics of the crème de la crème of Australian property markets dispels many myths about property markets.

  1. None of the best markets were capital cities. While each of the 6-best locations produced more than 100 percent capital growth over the 5-years ending January 2022, Australia’s three largest cities produced capital growth rates of 40 percent (Sydney), 38 percent (Melbourne) and 58 percent (Brisbane).
  2. The largest city has a total population of 68,400 (size does not matter).
  3. While the national population increased by 6.4 percent over this period, the population growth rate in 4 of the 6 hottest property markets was significantly below the national average.
  4. There is significant geographic variety with Victoria (1), Tasmania (1), Queensland (1) and New South Wales (3) all producing elite performers.
  5. Climatic conditions range from warm to quite cold, sunshine and snow (‘nice weather’ is a subjective assessment and never has been a driver of real estate price growth).
  6. Similarly, one would be very mistaken to think ‘coastal’ has anything at all to do with ‘capital growth’. 2 of Australia’s best 6 property markets are inland locations and many other inland wonders weren’t that far from a podium result.
  7. Proximity to its capital city is irrelevant. The horse and cart era ended a century ago.

Launceston TAS

  • Population: 68,400
  • Median age: 40
  • Population growth [5YE 2021]: 8 percent
  • Distance to state capital: 200 klm
  • Median house price [January 2022]: $550,000
  • 5-year capital growth: 110 percent
  • Residential vacancy rate [March 2022]: 0.8 percent
  • 5-year change in advertised house rent: was $300pw (Mar 2017), now $480pw (Mar 2022)

Launceston is the primary service centre for northern Tasmania, with retail, education and health a staple of its economy.

The broader region is home to the highest quality agriculture in the world and supports a very strong food manufacturing sector.

With internationally awarded wineries, great restaurants, multiple historic experiences and beautiful scenery it is no wonder that the tourism sector has taken off. Ditto its popularity to host major sporting events, festivals and conferences.

110 percent capital growth and circa $9,000 increase in annual rental incomes over the last 5-years is an outstanding return on investment enjoyed by dozens of Propertyology clients.

Jeremy Wilkinson of Harcourts Launceston told Propertyology “…mainland Australians and internationally, Launceston’s profile has gone through the roof in recent years. So many people are envious of our food and beverages, our natural landscapes, our lifestyle and our economy.

Housing supply is still incredibly tight in Launceston. Australia’s 34th largest city only had 1,007 dwellings listed for sale at the end of April 2022, less than half the 2,089 dwellings for sale 5-years earlier.

Meanwhile, total advertised rental supply has also reduced significantly, from 264 dwellings 5-years ago to just 150 dwellings right now.

Eurobodalla NSW

  • Population: 39,400
  • Median age: 54
  • Population growth [5YE 2021]: 8 percent
  • Distance to state capital: 300 klm
  • Median house price [January 2022]: $850,000
  • 5-year capital growth: 111 percent
  • Residential vacancy rate [March 2022]: 0.4 percent
  • 5-year change in advertised house rent: was $480pw (Mar 2017), now $810pw (Mar 2022)

Located 4-hours south of Sydney and 2.5 hours south-east of Canberra, the municipality of Eurobodalla is nestled between the ocean and a mountainous backdrop. The main townships are Moruya, Batemans Bay and Narooma.

The region’s economic heritage is based on dairy farming, forestry, sawmilling and commercial fishing. Domestic tourism has expanded recently.

Natural landscapes dotted with boats and caravans depict the very popular retirement lifestyle (hence the median age of 54).

Very tight housing supply has placed intense pressure on Eurobodalla’s real estate.

Orange NSW

  • Population: 42,800
  • Median age: 37
  • Population growth [5YE 2021]: 9 percent
  • Distance to state capital: 260 klm
  • Median house price [January 2022]: $680,000
  • 5-year capital growth: 112 percent
  • Residential vacancy rate [March 2022]: 0.6 percent
  • 5-year change in advertised house rent: was $330pw (Mar 2017), now $530pw (Mar 2022)

“Public perception about Orange and regional Australia more broadly has really matured over the last 5 or so years,” Ash Brown of One Agency told Propertyology.

One of Australia’s most consistent property markets, the stability of Orange’s real estate is its incredibly diverse economy that boasts one of the best quality health precincts in the country, Charles Sturt university, quality retail, agriculture, manufacturing, tourism and Australia’s second largest gold mine.

A highly productive fruit growing region with numerous wineries and sheep, Orange is headquarters for the state government’s Department of Primary Industries.

“People from the big smoke now appreciate the quality of our infrastructure, amenities, our culture and more jobs than we can fill,” said Mr Brown. “Every week I receive enquiries from people contemplating a relocation, predominantly from Sydney. I explain to them that Orange has everything that Sydney offers, minus its congestion and sky-high mortgages.”

Noosa QLD

  • Population: 56,800
  • Median age: 47
  • Population growth [5YE 2021]: 3 percent
  • Distance to state capital: 150 klm
  • Median house price [January 2022]: $1,200,000
  • 5-year capital growth: 118 percent
  • Residential vacancy rate [March 2022]: 0.6 percent
  • 5-year change in advertised house rent: was $630pw (Mar 2017), now $830pw (Mar 2022)

Noosa has always been a holiday hotspot. Over the last decade, its amenities have evolved to target a bigger slice of the luxury tourism market. Noosa is now Queensland’s equivalent of Byron Bay.

“We have always been a desirable location for southern buyers, especially Melbournians, but we observed accelerated southern buyer activity once COVID arrived,” said Olivier Miller of Laguna Real Estate. “Some southern buyers relocated permanently to Noosa, others purchased to have a safe haven to alternate between their hometown and here.”

A $1.2 million median house price makes Noosa Australia’s 5th most expensive township. Noosa house prices are higher than 7 out of 8 capital cities.

Noosa’s demographic has evolved, attracting higher income homeowners. And it is likely to remain a magnet for the fast-growing segment of society who embrace the work-from-home lifestyle movement.

An interesting juxtaposition is that the key industry which Noosa depends heavily on, tourism, pays relatively low-income wages. Given the elevated price of Noosa rents, there is a growing challenge to attract and retain retail assistants, waiters and cleaners.

Bass Coast VIC

  • Population: 38,800
  • Median age: 50
  • Population growth [5YE 2021]: 16 percent
  • Distance to state capital: 140 klm
  • Median house price [January 2022]: $800,000
  • 5-year capital growth: 120 percent
  • Residential vacancy rate [March 2022]: 0.2 percent
  • 5-year change in advertised house rent: was $330pw (Mar 2017), now $1,400pw (Mar 2022)

The Bass Coast municipality is officially Australia’s strongest magnet for attracting relocators. Over the last 5-years, net internal migration alone added a whopping 13.8 percent to the region’s population.

According to Joshua Dunstan of O’Brien Real Estate, the region’s quality lifestyle and affordable housing (relative to Melbourne) is driving growth.

Just a 2-hour drive east of Melbourne, Wonthaggi is the primary services centre of the Bass Coast region. Inverloch, Venus Bay and Cape Peterson being other prominent townships.

“We are becoming a more youthful demographic. Retirees still love it, but a lot of young families are settling here. New housing estates are being developed to accommodate the strong demand,” said Mr O’Brien.

The region maintains its dairy farm DNA, but its economy has evolved to include value-added agriculture services and a vibrant tourism sector. Phillip Island is particularly popular for its spectacular wildlife, water sports and annual motor racing events.

Byron NSW

  • Population: 36,200
  • Median age: 44
  • Population growth [5YE 2021]: 4 percent
  • Distance to state capital: 750 klm
  • Median house price [January 2022]: $1,800,000
  • 5-year capital growth: 130 percent
  • Residential vacancy rate [March 2022]: 0.6 percent
  • 5-year change in advertised house rent: was $820pw (Mar 2017), now $1,200pw (Mar 2022)

With a 130 percent increase in median house price, Byron was officially Australia’s best-performed property market over the 5-years ending January 2022.

As with Launceston, Orange, Eurobodalla, Noosa and Bass Coast, Noosa’s spectacular property market performance was driven by a combination of strong local economic conditions, significant local confidence and very tight housing supply during the timeframe in question.

Testament to Propertyology’s skill as (national) buyer’s agents and thought-leading property market analysts, many of our property investor clients have enjoyed the capital growth and strong investment cash flows through investing in 2 of these 6 locations.

Like to know more? Contact us here.

Here’s how we combine our thought-leading research with Propertyology’s award-winning buyer’s agency services.

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