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Where To Find Double-Digit Property Price Growth

Where To Find Double-Digit Property Price Growth
November 14, 2019 Simon Pressley

“Boom”: there’s no official definition for a ‘property boom’ however, I think it’s reasonable to conclude that a market which produces double-digit growth in any 12-month period is booming.

The last Australian capital city to produce double-digit real estate growth in a calendar year was Hobart in 2018.

The last capital city to push through the 20 per cent threshold in a single year was Darwin (22.2 per cent) in 2007. Wowee!

In fact, in spite of Darwin’s recent woes, the Top End has produced double-digit price growth more times than any other Australian capital city since the turn of this century – 10 times, the last being 12.1 per cent in the 2012 calendar year.

 

Related article: Darwin’s untapped real estate potential

Related article: More growth to come for Hobart

 

Over the last five years, Hobart is a resounding winner for the title of Australia’s best-performed property market. The median house price in the Hobart (middle-ring) municipality of Glenorchy increased by 54 per cent and median rents by 35 per cent over the 5-years ending June 2019.

Looking back over history, the 5-year period ending 2007 was an extremely prosperous era for Australian real estate, particularly in large parts of regional Australia where there were multiple locations that saw property prices double in only 5 years [refer below chart].

Capital cities also performed well in 2007, with every capital city other than Sydney producing double-digit price growth.

In 2002, 7 out of 8 capitals produced double-digit growth and then all 8 capitals did it again in 2003.

Canberra Sydney Darwin Brisbane Adelaide Hobart Melbourne Perth
2000 X
2001 X X X X
2002 X X X X X X X
2003 X X X X (36%) X X (44%) X X
2004 X X X X X
2005 X X X
2006 X X (32%)
2007 X X X X X X X
2008 X X
2009 X
2010 X X X X
2011
2012 X
2013 X X
2014 X
2015 X X
2016 X X X
2017 X X
2018 X
Total years 6 8 11 4 6 6 8 7

As for that 20 per cent per year milestone, Sydney last broke it in 2002 (22.9 per cent), Brisbane (22 per cent) and Hobart (32 per cent) last did it in 2004, and Adelaide’s median house price increased by 21.5 per cent in 2003.

Over in the west, Perth had consecutive years of in excess of 20 per cent in 2005 and 2006.

Canberra also had back-to-back years in 2002 and 2003.

Melbourne came close in 2001 (19 per cent) and 2007 (18.2 per cent).

During the last Sydney and Melbourne boom, the highest rates of growth were 15.5% and 13.7%, respectively. Both occurred in the 2016 calendar year.

But it’s never always rosy. We only look back to 2011 when 8 out of 8 capital cities declined in value. 5 out of 8 declined again in 2012. And, over the last 20 years, Sydney’s median house price declined in five separate calendar years.

Many Australians might be surprised to learn that, while 7 out of 8 capital city property markets have generally been subdue in 2018 and 2019, other parts of Australia produced double-digit capital growth.

The entry price in many of these locations is more affordable than capital cities and rental yields are higher.

This highlights exactly why Propertyology always maintains an open mind to regional locations as well as capital cities. Of the six (6) different Australian cities in four different states that our buyer’s agents are actively investing in right now, one is a capital city.

Over the 12-months to July 2019, according to official CoreLogic data, double-digit increases in median house prices occurred in the central Queensland locations of Emerald (31 per cent growth) and Moranbah (24 per cent).

 

Related article: Queensland’s double-digit growth potential

Related article: Prices have tripled in 111 Australian regions over last 20 years

 

In New South Wales, Snowy Monaro (18 per cent), Parkes (12 per cent), and Leeton (11 per cent) were strong.

Port Augusta (17 per cent), Whyalla (17 per cent), Renmark (16 per cent), and Broken Hill (14 per cent) were the South Australian star performers.

Results like this occur somewhere every single year, but don’t expect to read about them in mainstream media. No wonder Australians are so uneducated about Australian real estate opportunities.

The Victorian regional municipalities of Alpine (17 per cent), Corangamite (11 per cent), Campaspe (11 per cent), Bass Coast (11 per cent), Hepburn (10 per cent), Wangaratta (10 per cent), and Moira (10 per cent) all made double-digits.

The only capital city locations to produce double-digit property price growth over the 12-months ending July 2019 were Clarence and Sorrell (both 10 per cent).

Regional Tasmanian municipalities of Kentish (16 per cent), Northern Midlands (14 per cent), George Town (12 per cent), and Huon Valley (10 per cent) have the combination of a low entry price, strong capital growth, and high yields.

Looking forward, various parts of Australia possess fundamentals for potential double-digit growth over the next 12 months. There are candidates in every state and, as with the last couple of years, they will again be found outside of capital cities.

Remove the blinkers, folks!

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