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What are Australia’s 40 most expensive cities?

What are Australia’s 40 most expensive cities?
May 10, 2019 Simon Pressley

Australia’s biggest city, Sydney, has lost its mantle for having Australia’s most expensive median house price. No, the new titleholder isn’t Melbourne; it isn’t even a capital city. In fact, on the scale of population size, Australia’s most valuable real estate is in Australia’s 73rd biggest city.

With a population of 34,500 people and a median house price as at December 2018 of $987,500, Australia’s most expensive city is Byron Bay, in northern New South Wales.

Byron’s median house price increased by a whopping 64 per cent over the last 5 calendar years, propelling it to the top of the national tables. Sydney and Melbourne both produced a 44 per cent increase over the last 5 years to $950,000 and $772,500, respectively.

The gap is likely to widen with the median house price in Byron continuing to rise (up 2.9 per cent during the December quarter) while prices in both Sydney and Melbourne have been falling at an annual pace of 10 per cent.

While Melbourne is Australia’s second largest city, it’s ranked sixth for median house price.

A couple of hours south of Sydney in the Greater-Illawarra region, Kiama (third), Wingecarribee (fifth) and Wollongong (seventh) is among Australia’s most expensive real estate.

Victoria’s Surf Coast (fourth), Noosa in south east Queensland (eighth), Ballina (ninth) and Canberra complete the Top 10.

Australia’s best-performed capital city property market over the last three years, Hobart, only just scraped in at number 40 on the ‘most expensive’ list.

 

What has driven Byron’s property market?

Byron’s median house price has increased by an average of 10.1 per cent over the last 20 years. It’s the highest rate of growth of any Australian city.

While every single location in Australia (regional and capital cities) have had multiple years of double-digit price growth over the last 20 years, it’s staggering that Byron has averaged double-digit growth every single year for two decades. I doubt whether there’s another city anywhere in the world that has done that!

Australia’s most easterly city, the sun rises in Byron Bay ahead of any other location, is popular for its climate, beautiful beaches, surfing, cafes, good local produce, and surrounding national parks.

The average annual population growth rate of 0.9 per cent is well below the 17-year national average of 1.5 per cent.

Byron’s status is the ultimate proof that the size of a city’s total population or the annual rate of population growth are not the biggest drivers of property prices. There’s a large number of factors which influence property markets.

In Byron’s case, housing demand is primarily driven by the affluent, middle-aged, Australian-born couple. Census data says Byron’s median household age is 44 (compared to the national average of 38) and there’s a below-average number of children per household.

In spite of it being Australia’s most expensive city, the 36 per cent of Byron households whom own their dwelling outright is above the national average of 31 per cent.

Byron is one of dozens of examples of popular Australian non-capital city locations.

The local economy is very reliant on tourism. That said, many of the local residents own businesses and may work in other parts of Australia across a wide range of industry sectors. This is made increasingly possible in non-capital city locations such as Byron through more efficient internet access and improved transport connections.

Byron is only a two hour drive up the highway to Brisbane or a one-hour flight to Sydney, via Ballina (30-minutes from Byron). The Gold Coast international airport is also only an hour away.

Very significant to Byron’s success story is the development of the Ballina airport. Clever strategic planning in a bid to attract more people to the area, the local government renamed the airport to ‘Ballina Byron Gateway Airport’ in 2005.

The subsequent growth in airport passenger volumes has been phenomenal. It highlights the very positive impact that investment in airport services can have a on a community’s economy.

Fun-Facts about Australia’s 40 most expensive cities

As forecast by Propertyology several years ago, an increasing number of retirees are relocating away from capital cities.

Review of Census data confirms that several of the regional cities listed on Australia’s 40 most expensive have a median household age that is well above the national average (and rising). There’s also a smaller number of people living within those households and outright ownership ratios are significantly better than the national average.

Expensive locations with very high age demographics generally aren’t particularly good for property investors. In addition to having so much capital tied up in one asset, rental yields are lower, and the pool of renters is often low, while the local economy is generally less robust (the older demographic is at the financial preservation stage of their life).

  • EUROBODALLA (Batemans Bay), on the south coast of New South Wales, has a higher median house price than Adelaide, Hobart and Darwin and Australia’s highest age demographic (median household age of 54);
  • BRISBANE is Australia’s third largest city yet its median house price is more affordable than twenty-one other cities, including eighteen non-capital locations;
  • KIAMA has an (outright) home ownership rate of an incredibly high 46 per cent (well above the national average of 31 per cent). Last year, 68 per cent of its population growth came from Australians relocating from a different city;
  • BUSSELTON (median house price $510,000) is one of four Western Australian locations among Australia’s 40 most expensive. Busselton’s median house price increased by 185 per cent in just five years, ending December 2007. 14 per cent of Busselton’s workforce are employed in the construction sector (national average 8 per cent);
  • GOLDEN PLAINS, a municipality one hour west of Melbourne, has arguably the lowest rental tenures in Australia (only 9 per cent of all households, compared to 31 per cent national average). 97 per cent of dwellings are detached houses;
  • NOOSA is home to Queensland’s most expensive real estate (median house price $735,000). In 2018, Noosa defied the capital city trend and produced an 11 per cent increase in median house prices. Indicative of its high age demographic, there were 19 more deaths than births in Noosa last year;
  • MAITLAND is one of Australia’s fastest growing cities (average annual population growth rate of 2.4 per cent over the last 17 years, compared to 1.5 per cent national average). Maitland has a youthful demographic (median household age of 36) while 12 per cent of its workforce are employed in the manufacturing sector (the national average is 9 per cent);
  • HOBART has the highest outright home ownership of all capital cities. 81 per cent of residential dwellings in Hobart are detached houses, the highest ratio of all capital cities. Hobart’s 2018 population growth rate was 140 per cent more than 5 years ago;
  • BELLINGEN, located 30-miuntes south of Coffs Harbour, had a total population growth of only 12 people last year. The median house price increased by a cumulative 22 per cent over the last three calendar years (Hobart was the only capital city to perform better);
  • SURF COAST (Great Ocean Road country) has a median house price that’s higher than 7 out of 8 capital cities. The 9.5 per cent average annual increase over the last 20 years is a superior increase in real estate prices to every capital city;
  • COFFS HARBOUR is Australia’s 30th largest city and has the 23rd most expensive real estate. 15 per cent of Coffs Harbour’s workforce are employed in healthcare (national average 12 per cent) while the city is Australia’s largest producer of blueberries. Over the four years ending 2004, Coffs Harbour’s median house price increased by 150 per cent;
  • ALICE SPRINGS is Australia’s 89th largest city and 35th most expensive. Alice Springs real estate prices trebled in value over the last 17 years (from $158,000 to $470,000) while its population actually declined by 315 people over the same period of time;
  • SYDNEY’s population increased by 93,237 last year however, 77,089 was from overseas migration. The 10.5 per cent increase in Sydney’s median house price over the last three calendar years is inferior to 30 out of 40 Australia’s most expensive locations. Size doesn’t matter!

 

City Median House Price

 

[Dec 2018]

Median House Price Growth 3YE Dec 2018 Median House Price 20yr avg annual growth Population Ranking >Population Growth Rate

 

[2017/18]

Median Household Age [2011 / 2016] Median Household Size Rented / owned outright
Australian average         1.6% 37 / 38 2.6 31% / 31%
1 Byron $ 987,500 36.2% 10.1% 73 1.7% 42 / 44 2.4 31% / 36%
2 Sydney $ 950,000 10.5% 7.7% 1 1.8% 36 / 36 2.8 34% / 29%
3 Kiama $ 910,000 26.4% 7.7% 100 2.4 45 / 47 2.5 19% / 46%
4 Surf Coast $ 835,000 33.6% 9.5% 76 2.9 40 / 42 2.6 21% / 39%
5 Wingecarribee $ 814,500 30.3% 9.1% 47 1.6% 45 / 47 2.4 20% / 43%
6 Melbourne $ 772,500 22.5% 8.5% 2 2.5% 36 / 36 2.7 30% / 30%
7 Wollongong $ 755,000 29.1% 8.1% 13 1.3% 38 / 39 2.6 30% / 35%
8 Noosa $ 735,000 30.1% 7.4% 41 1.3% 45 / 48 2.4 25% / 39%
9 Ballina $ 680,000 19.3% 7.8% 52 1.7% 45 / 48 2.3 28% / 41%
10 Canberra $ 657,250 17.7% 8.1% 7 2.2% 34 / 35 2.5 32% / 27%
11 Central Coast $ 655,000 24.2% 7.5% 9 0.8% 42 / 42 2.5 27% / 35%
12 Shellharbour $ 650,000 23.8% 8.6% 33 1.7% 37 / 39 2.7 27% / 34%
13 Tweed $ 650,000 31.3% 8.5% 24 1.3% 45 / 47 2.4 27% / 40%
14 Gold Coast $ 632,500 12.5% 6.3% 6 2.6% 37 / 38 2.6 37% / 36%
15 Newcastle $ 628,500 28.3% 8.5% 8 1.0% 37 / 37 2.4 35% / 30%
16 Macedon Ranges $ 610,000 31% 8.2% 48 2.0% 41 / 42 2.7 15% / 36%
17 Sunshine Coast $ 600,000 16.5% 7.1% 10 2.8% 42 / 43 2.5 30% / 33%
18 Port Stephens $ 575,000 29.6% 7.7% 32 1.3% 42 / 45 2.5 26% / 39%
19 Shoalhaven $ 565,000 37.8% 8.3% 22 1.3% 46 / 48 2.3 25% / 44%
20 Yass Valley $ 565,000 7.4% 8.1% 126 1.2% 40 / 42 2.7 18% / 34%
21 Port Macquarie $ 550,000 20.4% 7.2% 29 2.1% 47 / 48 2.3 26% / 42%
22 Brisbane $ 550,000 11% 7.0% 3 2.3% 35 / 35 2.7 34% / 26%
23 Coffs Harbour $ 537,000 22.3% 7.7% 30 1.3% 42 / 44 2.4 30% / 36%
24 Geelong $ 531,500 32.9% 8.7% 11 2.6% 39 / 40 2.4 28% / 35%
25 Bellingen $ 525,000 22.4% 7.8% 156 0.1% 46 / 49 2.3 25% / 45%
26 Perth $ 520,000 -2.3% 7.0% 4 1.0% 35 / 36 2.6 27% / 28%
27 Busselton $ 510,000 -0.4% 6.8% 60 1.4% 39 / 42 2.5 28% / 33%
28 Margaret River $ 500,000 -7.4% 5.9% 136 3.1% 39 / 39 2.5 29% / 31%
29 Eurobodalla $ 500,000 29.9% 7.8% 61 0.5% 50 / 54 2.2 25% / 47%
30 Bega Valley $ 493,000 23.3% 8.9% 71 0.7% 48 / 51 2.2 23% / 45%
31 Darwin $ 485,000 -13.4% 5.8% ** 17 -0.2% 33 / 33 2.7 44% / 17%
32 Adelaide $ 480,000 7.7% 7.1% 5 0.8% 39 / 39 2.5 29% / 31%
33 Golden Plains $ 477,000 31.1% 7.4% 99 2.4% 39 / 39 2.8 9% / 35%
34 Mount Alexander $ 475,000 26.7% 8.9% 116 1.1% 47 / 49 2.2 17% / 45%
35 Alice Springs $ 470,000 3.3% 6.6% ** 89 -0.1% 33 / 35 2.6 44% / 16%
36 Scenic Rim $ 470,000 6.8% 6.8% 55 2.0% 42 / 44 2.6 24% / 26%
37 Maitland $ 470,000 19.9% 8.2% 28 2.7% 36 / 36 2.7 29% / 29%
38 Moorabool $ 470,000 34.3% 7.8% 72 2.1% 39 / 40 2.6 18% / 33%
39 Broome $ 463,500 -17.4% 5.2% 124 -0.2% 32 / 33 2.7 56% / 15%
40 Hobart $ 452,500 28.5% 7.7% 12 1.5% 39 / 40 2.4 28% / 33%

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.

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