Just like students graduate from high school every year, so, too, do many property markets move up the ranks. Now that’s not to say that they all become property Rhode scholars overnight, rather, they have improved from an also-ran to a graduate with respectable results.
Of course, I’m talking about property cycles, which see different locations producing different results depending on a variety of metrics.
As a full-time student of Australian property markets, I’ve learned that the most reliable formula for sustained growth is the combination of affordable housing plus improvement within a local economy, and that’s again proven true with the top performers of 2018.
Top property spots
Propertyology recently analysed the changes in median house prices over the 2018 calendar year for each of Australia’s 550 city council jurisdictions.
For data integrity purposes, we excluded locations that had fewer than 500 sales in the year.
What the results are saying loud and clear is that, contrary to those who focus just on a few mainland capital cities, 2018 was not one to forget for a huge number of locations.
Victoria had 13 of the spots in the Top 30, including 6 out of the top 10 and growth in annual median house prices ranging from 7.1 per cent up to 15.1 per cent. Outstanding!
The majority of these locations are in regional Victoria such as South Gippsland, Macedon Ranges and Bass Coast. Bigger profile regional cities such as Geelong and Ballarat also did well, along with the affordable outer-fringe of Melbourne in places like Melton, Wyndham and Hume.
Meanwhile, Greater-Melbourne produced a median house price fall of 9.1 per cent in the same year. Chalk and cheese!
New South Wales produced eight of the Top 30 performers and, unsurprisingly, these were all in major regional locations.
As we’ve reported before now, a significant 200,000 extra jobs have been created in locations outside of Australia’s 8 capital cities over the last two calendar years. That’s always going to improve local confidence and drive property prices.
Byron is the notable exception to the ‘affordability rule’. Housing in this popular tourism town is now more expensive than Melbourne. The recent price growth is a bi-product of its strong tourism-driven local economy. Oh, and the “Hemsworth Effect” – perhaps!
Good ol’ Tassie is continuing its strong run. Australia’s smallest state produced a staggering 6 out of Australia’s Top 30 property markets, including the nation’s best performer – Glenorchy with 16.4 per cent growth.
One of Greater-Hobart’s seven city councils, Glenorchy’s median house price increased by 52.9 per cent over the five years ending December 2018. According to official Core Logic data, that capital growth is superior to Greater-Sydney and Greater-Melbourne (both 44 per cent). We also know that investment cash flows are significantly better in Hobart than Australia’s two most expensive cities.
In 2018, we saw the joy spreading throughout the state of Tasmania. The Launceston region recorded median house price growth of 12.4 per cent while Burnie and Devonport also started their growth cycles.
Queensland was the only other State to feature in the list, with Noosa coming in at number 13 after posting a house price increase of 10.5 per cent.
It’s clear that a common denominator for many of Australia’s best-performed property markets is the positive influence of tourism and agriculture on their respective local economies.
Tasmania, and the regions in Victoria and New South Wales are home to a number of very productive agricultural provinces, which are thriving from the rise of Asia’s middle class.
And, we’ve been saying for a few years now that many parts of regional Australia are benefitting from the world-wide tourism boom.
Tourism and agriculture are a couple of key industries that Propertyology focused our attention on a few years ago.
The plethora of great scenery, food experiences, and some underrated historical attractions continue to drive economies and property markets in locations like Launceston, Orange, Hunter Valley, Byron Bay, Ballina and Noosa.
Top of the class
While Greater-Sydney posted a median house price fall of 10 per cent in 2018, in that same state, the region of Snowy Monaro won the title as Australia’s strongest 2018 regional market with an increase in median house prices of 15.5 per cent.
The city council area of Snowy Monaro is south of Canberra on the NSW-Victoria border. The township of Cooma as the heart of the beautiful Snowy Mountains.
Why wouldn’t you want to own real estate in such a picturesque, as well as affordable, region?
The robust growth in visitor volumes to Canberra, which has been Australia’s second strongest capital city property market over the past two years, is certainly spilling over to Snowy Monaro where the median house price is still a very affordable $335,000.
Likewise, while Melbourne is currently in the midst of a property market downturn, 90 minutes away in the local government area of Baw Baw, which features the township Warragul, you will find another of Australia’s strong property markets. Baw Baw’s real estate increased in value by 15.1 per cent in 2018.
Aiding Baw Baw’s property market is a clever city council marketing campaign to attract Melbourne residents seeking out an affordable alternative to live.
|Rank||STATE||CITY COUNCIL||MEDIAN HOUSE PRICE CHANGE|
|YE Dec 2018||20 YE Dec 2018|
|2||NSW||Snowy Monaro Regional (A)||15.5%||7.6%|
|Capital Cities [YE Dec 2018]|
Banging the drum
I make no apology for constantly banging the drum about the wonderful lifestyles, growing economies, and affordable housing in an abundance of Australian regional locations.
If you know me, you’ll know that I refuse to follow the herd and I don’t allow detractors to deter from making decisions through analysing real estate market fundamentals!
As this report shows, there’s always much more to Australian real estate than the Sydney-Melbourne daily commentary. Hallelajuh for that!
In 2018, as with every single year, there were many property markets across Australia that performed exceptionally well, including a host of affordable locations.
Some of the locations that did well last year will do well again in 2019, while others may be towards the back end of their growth cycle.
However, one thing is for sure, the best-performed markets for the next three to five years probably aren’t anywhere on the Class of 2018. But I think I have a pretty good idea which ones they will be.
Propertyology is Australia’s premier property market analyst and award-winning buyer’s agency. Every capital city, every non-capital city, we analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.