Economists and property researchers are feeling good about the future. They’re saying, as a whole, Australia is considered a growth market for property prices. And they’re putting it down to our financial regulations and a broadly stable economy. One researcher even said that the next five years in Australia will be better than the last five in terms of growth in median dwelling prices. This is all well and good, but I wanted to break this down for buyers considering bidding in 2020.
The sparkling harbour city. Sydney’s median house price is currently $973,664. But that figure has not deterred new year buyers, and it’s predicted not to deter buyers for the remainder of the year. Sydney is one of three global cities tapped to have the best property growth potential in 2020 alongside Moscow and Lisbon with increases of between 6 percent and 7.9 percent forecast this year.
Top start for the top end. Locals are saying that Darwin real estate has had its best start to a calendar year in a decade. In the last quarter of last year, Darwin experienced a whopping 33 percent increase in sales volumes, largely driven by affordability. The median house price in Darwin is $460,000; by the way that’s about half of the median price in Sydney.
Melbourne. It’s no longer the more affordable big city, with prices edging closer and closer to Sydney. Melbourne has a median price of $859,500, and judging by the two consecutive quarters with growth of more than 3 percent (the best growth since 2017), the impact of more investors and increased migration is being felt in the property market. They’re saying that Melbourne is set to overtake Sydney in population as soon as 2026, so price growth will be interesting to watch here in years to come.
Brisbane begins its rebound. The Brisbane property market had slower growth for homeowners and investors over the past few years but 2020 is shaping up to be more promising for the Queensland capital city with a 0.5 percent increase in house values in January and 2 percent growth over the quarter. Oversupply in Brisbane apartments is also starting to moderate so we could begin to see a rebound in this market.
Houses trump units in political hub: In the government bubble that is the ACT, jobs and population growth helped Canberra outperform the nation with a 2.3 percent increase in property values in the past year. The median property price is now $611,841 in Canberra thanks to a mix of population, private money and government proximity. While homes are doing well, units and apartments are oversupplied and have only seen 3.9 percent capital growth in the past three years, compared to 14.5 percent for houses.
City of Churches blessed with investment: While Adelaide was one of three capital cities that recorded a value drop last year, property pundits are big believers in its potential. There are some exciting economic fundamentals here for the year ahead, like the investments and increases in hospitals, tertiary education, industry and military, but it’s hungry interstate investors who are likely to push prices.
Low stock numbers in the west: Perth currently has the lowest median house value of any major capital city. Home values in Perth took a beating in 2019, down 6.8 percent on the previous December, settling at a median of $437,080 by the end of the decade. But it’s not all doom and gloom. With jobs returning and population growth improving for the state, buyers are capitalising on lower prices and easier lending standards.
Hobart housing hits new heights: Hobart has a huge supply challenge that is driving prices of both rentals and sales skyward. For example, rents in some suburbs have risen by 20 percent in the past year. Great news for investors; bit rough for renters. Vacancy rates are about as low as they can get, 0.6 per cent compared to 2.5 percent for the rest of the nation.
For a deeper dive take a look at our February Market Essentials report here: http://attachedfiles.aunz.s3.amazonaws.com/24534/MarketEssentialsReport_RayWhiteLaneCove_FEB2020.pdf.