2019 was an interesting year for property markets around Australia with CoreLogic’s Head of Research, Tim Lawless, saying “it will go down as the year when new records were set”.
“In 2019 we saw the housing market move through the largest and longest correction on record, followed by a fast-paced rebound in values through the second half of the year,” explained Mr Lawless.
“Housing turnover fell to record lows in 2019, as did new advertised stock levels. Interest rates reduced to levels previously unseen, while the concentration of investors in the market also plumbed new depths.”
So which areas performed the best when it comes to value growth? CoreLogic crunched numbers for its Best of the Best 2019 report and identified the regions around Australia that had the greatest 12-month change in values. When it comes to houses, “the biggest winners of the year have typically been premium value suburbs of Sydney and Melbourne,” said Mr Lawless. “In fact, amongst the top 10 best-performing suburbs for growth, seven were located in Sydney or Melbourne and show a median value of at least $1.1 million.”
When looking at growth in unit values, Victoria was a high performer. As the table shows, eight of the top 10 suburbs that showed the greatest growth in value over the 12 months were in Melbourne or Greater Victoria. Keep in mind though that past performance is not an indicator of future performance.
| Houses: Top 10 suburbs based on growth in value nationally | ||||
|---|---|---|---|---|
| Rank | Suburb(s) | Region | 12-month change in value | Median house value |
| 1 | St Kilda | Greater Melbourne | 19.6% | $1,584,805 |
| 2 | Moranbah | Rest of Qld | 19.0% | $216,100 |
| 3 | Melba | ACT | 17.1% | $620,471 |
| 4 | Carlingford | Greater Sydney | 15.4% | $1,485,663 |
| 5 | Loftus – Yarrawarrah | Greater Sydney | 15.2% | $1,008,205 |
| 6 | Surrey Hills (West) – Canterbury | Greater Melbourne | 14.6% | $2,514,345 |
| 7 | Broadsound – Nebo | Rest of Qld | 14.6% | $96,919 |
| 8 | Sydenham – Tempe – St Peters | Greater Sydney | 14.5% | $1,301,431 |
| 9 | St Kilda East | Greater Melbourne | 13.6% | $1,356,886 |
| 10 | Woronora Heights | Greater Sydney | 13.1% | $1,137,938 |
| Source: CoreLogic Best of the Best 2019. 12-month change is the percentage difference between the hedonic home value index in the same period compared to 12 months ago – SA2- (Statistical Area Level 2) Regions. Data is current to November 2019. Sorted by 12-month change. | ||||
| Units: Top 10 suburbs based on growth in value nationally | ||||
|---|---|---|---|---|
| Rank | Suburb(s) | Region | 12-month change in value | Median unit value |
| 1 | South Hedland | Rest of WA | 22.3% | $130,004 |
| 2 | Sandringham – Black Rock | Greater Melbourne | 18.6% | $846,381 |
| 3 | Kempsey Region | Rest of NSW | 17.6% | $342,693 |
| 4 | Beaumaris | Greater Melbourne | 17.1% | $1,024,929 |
| 5 | Bendigo | Rest of Vic. | 16.5% | $264,906 |
| 6 | Bright – Mount Beauty | Rest of Vic. | 16.4% | $385,068 |
| 7 | Mentone | Greater Melbourne | 16.0% | $624,396 |
| 8 | Mildura – North | Rest of Vic. | 15.8% | $178,364 |
| 9 | California Gully – Eaglehawk | Rest of Vic. | 15.3% | $240,054 |
| 10 | Collingwood | Greater Melbourne | 15.2% | $671,988 |
| Source: CoreLogic Best of the Best 2019. 12-month change is the percentage difference between the hedonic home value index in the same period compared to 12 months ago – SA2- (Statistical Area Level 2) Regions. Data is current to November 2019. Sorted by 12-month change. | ||||
Best-performing suburbs in each capital city based on value growth
CoreLogic also did the sums for each of the capital cities and the tables below reveal the suburbs in each capital city that demonstrated the greatest 12-month change in value for houses and units.
As the table shows, when it comes to houses, the top performers in Sydney, Melbourne, Canberra and Hobart all experienced double-digit growth while the suburbs in the other capital cities had more modest results.
Looking at units, the top-performing suburbs in many capital cities demonstrated growth in double figures, with Canberra, Darwin and Perth the only exceptions.
| Houses: Best-performing suburbs in each capital city based on value growth | |||
|---|---|---|---|
| Capital city | Suburb(s) | 12-month change in value | Median house value |
| Adelaide | Adelaide Hills | 8.0% | $586,179 |
| Brisbane | Hawthorne | 6.0% | $1,337,796 |
| Canberra | Melba | 17.1% | $620,471 |
| Darwin | Palmerston – South | 5.7% | $460,095 |
| Hobart | Risdon Vale | 10.9% | $287,669 |
| Melbourne | St Kilda | 19.6% | $1,584,805 |
| Perth | Hazelmere – Guildford | 1.5% | $503,196 |
| Sydney | Carlingford | 15.4% | $1,485,663 |
| Source: CoreLogic Best of the Best 2019. 12-month change is the percentage difference between the hedonic home value index in the same period compared to 12 months ago – SA2- (Statistical Area Level 2) Regions. Data is current to November 2019. Sorted alphabetically by capital city. | |||
| Units: Best-performing suburbs in each capital city based on value growth | |||
|---|---|---|---|
| Capital city | Suburb(s) | 12-month change in value | Median unit value |
| Adelaide | Brighton | 10.0% | $372,658 |
| Brisbane | Mitchelton | 11.8% | $408,745 |
| Canberra | Kambah | 5.0% | $417,268 |
| Darwin | Rapid Creek | 1.0% | $295,682 |
| Hobart | Moonah | 10.1% | $331,791 |
| Melbourne | Sandringham – Black Rock | 18.6% | $846,381 |
| Perth | Morley | 1.0% | $302,478 |
| Sydney | Sydenham – Tempe – St Peters | 11.5% | $780,352 |
| Source: CoreLogic Best of the Best 2019. 12-month change is the percentage difference between the hedonic home value index in the same period compared to 12 months ago – SA2- (Statistical Area Level 2) Regions. Data is current to November 2019. Sorted alphabetically by capital city. | |||
What is the outlook for property in 2020?
In 2020 growth in house prices is expected to remain positive but the pace is likely to slow down. Mr Lawless stated that CoreLogic expects the rapid rate of capital gains seen over the second half of 2019 to lose steam as stock levels rise and affordability deteriorates.
Some of the other reasons Mr Lawless anticipates the pace of growth to slow down include a weakening labour market and the likelihood that the number of first home buyers will fade as affordability impacts participation in the market. He did add that “investors are likely to be more active, chasing capital gains and opportunities for positive cash flow considering the inverted spread between mortgage rates and rental yields”.
“Some smaller capital cities could see improvement in conditions due to rising population fuelling housing demand, relatively healthy housing affordability although strength of labour markets remains a wild card in these markets,” said Mr Lawless.
Main image source: jax10289 (Shutterstock)
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