Australian house prices may no longer be rising at breakneck speed but in most places across the country, relative to people’s incomes, they are still very, very high.
Thanks to rock-bottom interest rates, government incentives, interstate migration and historic levels of demand from buyers over the past couple of years, prices have more than doubled in some parts of the country.
In dollar terms, it now costs hundreds of thousands of dollars more to buy a house than it did this time last year.
|Capital City||Median price now||Median price 1 year ago|
Over the past five years, that difference in price has become even more pronounced. Properties in most suburbs or towns across Australia are considerably more expensive than they were in 2017.
Some, like Sunshine Beach at Noosa and the alpine town of Jindabyne in NSW, have seen prices rise by nearly 200 per cent over that time.
Others, like Teneriffe in Brisbane, Anglesea in Geelong, and Palm Beach on Sydney’s Northern Beaches, have more than doubled in price.
But there are always exceptions, even in a property boom.
Data analysis by Domain found that NSW, Victoria, Queensland, ACT, the Northern Territory and Western Australia each have a clutch of suburbs where prices are actually cheaper now than what they were in 2017 – significantly, in some cases.
Only South Australia and Tasmania have not had a single suburb fall in value over the past five years.
In the ACT, homes in just two suburbs cost less than they did five years ago: Bruce, in the Belconnen area, and the Canberra CBD – but only for units, not houses.
Units in Bruce are 9.3 per cent cheaper now and units in Canberra CBD are 3.2 per cent cheaper.
The Northern Territory also has two suburbs where prices are lower than they were in 2017. The cost of a unit in Darwin City is 19.9 per cent lower now, with a median price of $432,5000, and the cost of a house in Humpty Doo, a commuter town about 40 minutes drive south of Darwin, is about 3.8 per cent cheaper, at $565,000.
What’s your suburb worth?
Domain chief of research and economics Nicola Powell said the opportunity to buy for less than 2017 prices was real, but advised buyers to do their homework before leaping in.
“If you’re looking to purchase a unit – and many are because we’ve seen houses over-perform – it always goes back to what is the quality and point of difference in the place you’re purchasing? And how broad is that buyer pool going to be when you go to sell it down the track?” she said.
“It’s important to buy a property that’s going to enable you to buy in the future and upgrade. If you’re looking to purchase particularly a unit in these areas where prices are still below that of 2017 levels, make sure you understand the developer you’re buying from, and what’s the point of difference between your place and others.”
In NSW, there are a number of suburbs where homes are selling for less than 2017 prices. They’re all in Sydney and they’re all units.
|NSW||Eastwood||Upper North Shore||Unit||$749,500||-10.6%|
|NSW||North Ryde||Upper North Shore||Unit||$755,000||-9.6%|
|NSW||Ultimo||City and East||Unit||$785,000||-9.1%|
|NSW||Eastgardens||City and East||Unit||$1,030,000||-8.8%|
|NSW||West Ryde||Upper North Shore||Unit||$615,000||-7.9%|
|NSW||Epping||Upper North Shore||Unit||$780,000||-7.7%|
|NSW||Zetland||City and East||Unit||$955,000||-6.9%|
|NSW||St Leonards||Lower North||Unit||$1,172,500||-1.8%|
|NSW||Centennial Park||City and East||Unit||$872,500||-0.9%|
In the upper north shore suburb of Epping, where the median price for a unit is 7.7 per cent less now than what it was five years ago, agent Betty Ockerlander said a big influx of new apartment buildings led to an oversupply in the area that peaked around 2016.
“They just kept building them and then there was an oversupply, so I’d say there are another few years to go before it evens out,” she said.
Epping’s unit market is recovering though. Prices are down over a five-year period, but Domain’s latest House Price Report shows that in the 12 months to March, prices rose by 3.3 per cent.
Ms Ockerlander said demand for units in Epping had risen more recently as buyers became priced out of the local housing market.
“Prices were going down but not anymore, they’re going up. That lack of affordability with houses or even units in neighbouring areas really puts Epping up there for buyers,” she said.
“We’ve got people buying two-bedroom units here so they can get their children into the local schools. The schools in Epping are excellent and that is attracting buyers.”
Unit prices in Lewisham, in Sydney’s inner west, are 1.8 per cent lower than they were five years ago, although they’ve risen by 3.1 per cent over the past 12 months. It’s a similar story in Newtown, where the median price for a unit is 0.7 per cent less than it was in March 2017 but has risen by an impressive 6.1 per cent in the 12 months to March.
Alex Mastoris of Cobden Hayson Annandale said the fact unit prices in these suburbs were still lower than they were five years ago – and that prices were now rising – could give buyers confidence.
“I agree this is an opportunity for buyers here now,” he said. “You’ve got bordering suburbs like Dulwich Hill that have seen a massive development boom in the past five years and that significant amount of supply has diluted prices in those areas.
“But prices are now rising. There are a lot of good quality boutique blocks that have been built in the last five years that make clever use of space and as a suburb, Lewisham is one that often flies under the radar. I’m noticing investors are starting to come back.”
In Victoria, Melbourne’s inner-city unit market is peppered with suburbs that are more affordable now than they were in 2017, thanks to an oversupply that the market is still recovering from.
Some suburbs, like Doncaster, Toorak, Southbank and Armadale, have suffered the bulk of their price falls over the past couple of years as the COVID property trend that favoured houses, particularly in the outer suburbs and regions, left inner-city units lagging behind.
But other suburbs that recorded negative results for units over a five-year period, such as Carlton, Melbourne City and South Yarra, are back on the rise.
“Given the fact an apartment costs the same or less than they cost to own five years ago, it’s an absolutely amazing opportunity for buyers right now,” said James Pilliner of Nelson Alexander Carlton.
“Apartments are the affordable way to live in the inner city. This is how contemporary people get around and remain in the inner city and live next to all the amenities.
“Unfortunately, there are many Australians who can’t get their head around living in one but it’s the entry level to owning real estate and it’s a way of saving.”
|VIC||East Melbourne||Inner Urban||Unit||$767,250||-44.4%|
|VIC||Box Hill||Inner East||Unit||$495,000||-14.6%|
|VIC||North Melbourne||Inner Urban||Unit||$512,500||-6.8%|
|VIC||Caulfield South||Inner South||Unit||$642,750||-1.9%|
|VIC||South Yarra||Inner Urban||Unit||$620,000||-1.6%|
The median price for a unit in one of Melbourne’s most sought after suburbs, East Melbourne, is 44 per cent less than what it was five years ago but Toby Campbell of Caine Real Estate said that the wide-ranging nature of apartment types in the area meant certain sales heavily impacted the overall median price.
“In March I sold two one-bed apartments. One was $116,000 in the Mantra hotel; the other was a $1.6 million apartment,” he said. “That’s why the result gets skewed. East Melbourne is always very difficult with statistics.”
That being said, now was still a very good time to be buying a unit in East Melbourne, Mr Campbell said.
“The real opportunity is that East Melbourne is starting to look like good value. It’s always been known for being really expensive but it hasn’t gone up as much as other suburbs. You can now buy property in East Melbourne for Richmond money,” he said.
“So, with prices rising everywhere else, this suburb starts to look more attractive; you’re stepping up to a prestige suburb for less. Instead of being 50 per cent more expensive, it’s now only 10 to 15 per cent more.”
In Queensland, there’s a raft of suburbs, many of them among Brisbane’s most sought after patches, where units are cheaper to buy now than they were five years ago.
Leafy inner-city favourites like Windsor, Indooroopilly, Bulimba and Wooloowin are all more affordable than they were in 2017, thanks to an oversupply of units that the city is well on its way to absorbing. The latest Domain data found Brisbane unit prices rose by a massive 9.3 per cent over the 12 months to March, to a record median of $437,034.
|QLD||Spring Hill||Brisbane North||Unit||$415,000||-6.4%|
“It’s the fastest-growing capital city unit market over the first three months of 2022, jumping 3.1 per cent,” Dr Powell said.
“This is the property boom Brisbane has long been waiting for, providing the biggest upswing in unit prices in 14 years,” she said.
In Woolloongabba, which has been earmarked as a suburb to watch thanks to its central position in the 2032 Brisbane Olympics, unit prices are still down by 3.9 per cent compared to five years ago.
But that’s changing fast: prices have risen by a massive 11.1 per cent in the past 12 months alone.
“There is a window of opportunity here now for sure,” said Brad Sissons of Coronis Inner South.
“Woolloongabba is one of those locations where you’re close to everything and the amount of infrastructure going in there is huge. Give it a couple of years and everyone will be kicking themselves that they didn’t buy units here now.”
He said demand had increased over the past year, which had helped counteract the oversupply of units in the area that had kept prices so low for so long, but that was shifting quickly as buyers, particularly single professionals, jumped on units in the $500,000 range.
“We’re getting couples and singles but I am noticing a lot of professional singles buying. They’re just getting into the market now and they want a value location. They’re saying they know what it’s going to be like in another five years.”
In Western Australia, it’s not just units that are more affordable than they were five years ago, there are some areas where houses are cheaper too.
Suburbs like Hammond Park, Bicton and Highgate all recorded house price falls over a five-year period.
Perth’s biggest price fall over five years, however, was for units in Victoria Park, a south-side suburb located just 10 minutes from the CBD. The cost of a median-priced unit there is now 26.3 per cent less than it was in March 2017. The current median is just $295,000.
Local agent Joe Mucci of Bourkes agency said it’s a secret that needs telling.
“We just don’t get enough inquiry. A few years ago I sold one for $340,000. You can now buy it for $270,000. We haven’t had a massive influx of eastern buyers as investors in the past couple of years and that’s often what helps drive that market,” he said.
|WA||Victoria Park||South East||Unit||$295,000||-26.3%|
|WA||Hammond Park||South West||House||$470,000||-8.7%|
|WA||Seville Grove||South East||House||$355,000||-4.1%|
“Opportunity abounds here because of the prices and the fact there’s not much competition. Look for location, square meterage and how well-maintained the strata complex is.”
Mr Mucci is marketing a two-bedroom unit with 180-degree views of the city and within walking distance of cafes and shops. He’s seeking offers above $279,000.
“These apartments were selling for low to mid-$300,000s. Now you can buy them for mid to high-$200,000s,” he said.
“There are some savvy people out there. If you have $280,000 in your super fund, you could go out there and throw some silly offers around.”
He said first-home buyers who had once bought Perth apartments were passing those up in favour of townhouses or even houses, simply because Perth’s prices were so affordable.
“As much as money is cheap, there aren’t as many first-home buyers around as there used to be. There’s a large divide between people who can buy property and people who can’t. Those who can have moved up to villas and townhouses. If we have a three-bed villa or unit, they are walking out the door, selling in one week.”