- Smaller capitals providing strong opportunities for investors
- Markets are broadly starting to recover
- Tight supply helping to keep prices elevated
Perth, Adelaide, and Hobart have the strongest property markets with rising sales suggesting prices could be on the rise.
According to the Hotspotting Price Predictor Index (PPI) for Winter 2023, currently, there are several areas across Australia where sales activity is weak, but prices remain strong because there is a shortage of listings of properties for sale.
Hotspotting Director Terry Ryder said areas within the smaller capital cities markets are showing a combination of higher demand and tight supply, making them ripe for growth.
“Jurisdictions where there is growing evidence of recovery in activity include Hobart, Sydney, some sectors of Melbourne, and the regional markets in NSW, Victoria, WA – where the key market of Mandurah has made a resurgence – South Australia and Tasmania,” said Ryder.
“Western Australia, South Australia, and Tasmania – headed by their capital cities Perth, Adelaide, and Hobart – are the jurisdictions with the strongest market pulses.”
Ryder said across the busiest markets of Perth and Adelaide the strongest sections are the cheaper areas, as these are cities where affordability is one of the key attractions for both homebuyers and investors.
“In Melbourne and Sydney, we’re seeing very different trends. In the biggest cities, the strongest markets tend to be the more expensive areas where interest rate levels are less impactful because there are many cash buyers, while the cheaper outer-ring precincts are struggling.”
According to Ryder, Gosnells in Western Australia is a standout location because of its low price point and strong sales activity.
Hotspotting General Manager Tim Graham said while it may not be fashionable, the City of Gosnells is a standout for attracting strong buyer demand – because it offers affordability in an area with good amenities.
“In simple terms, it’s what the mainstream buyer is looking for, whether they’re home-buyers or investors,” said Graham.
“Of the nine Gosnells suburbs in our analysis, eight have positive rankings – four rising, three consistency and one recovering markets.
“Most of these locations have median house prices in the $300,000s and $400,000s, providing a level of affordability that Melbourne and Sydney residents can only dream about – and it’s attracting investors from the eastern states in large numbers, too.”
Gosnells, Western Australia
Ryder said the nation’s most consistent market is Nairne in South Australia with a median house price of $580,000.
He said Nairne, in the Mount Barker region of the Adelaide Hills, has been making between 30 and 39 house sales per quarter since 2016.
“Nairne’s median house price also rose 24 per cent in the 12 months to April 2023, including 4.5 per cent in the most recent quarter.
“Its long-term capital growth rate is also nine per cent per year.”
Nairne, South Australia
According to the report, other locations where there is strong growth potential include, Canning and Mandurah in WA, Gladstone in QLD, Greater Geelong and Melbourne City in Victoria, Sydney City in NSW and Kingborough in Tasmania.
Markets recovering
Graham said recovery is emerging as a dominant theme in the latest analysis of markets across Australia.
He said although locations with negative rankings still outnumber those with positive ones, the gap has closed, with the number of plateau markets reducing and the number of consistency and recovering locations rising.
Ryder said that there is growing evidence of the emerging trend of more and more buyers opting for apartments in desirable areas.
“This survey continues to show that suburbs in the inner-city areas of Melbourne and Sydney have maintained good sales activity.”
“We rate the City of Melbourne as the strongest market in Greater Melbourne and the City of Sydney has the busiest in Greater Sydney.”
“This pattern is also evident in some parts of the Regional NSW market, with prices stronger for units than for houses in the same locations, and also in inner Hobart.”
Top end rising
Graham said in Perth and Adelaide, the strongest sections of those markets are the cheaper areas, as these are cities where affordability is one of the key attractions for both homebuyers and investors.
“In Melbourne and Sydney, we’re seeing very different trends.
“In the biggest cities, the strongest markets tend to be the more expensive areas where interest rate levels are less impactful because there are many cash buyers, while the cheaper outer-ring precincts are struggling.”
He said many of the outer-ring municipalities of Greater Melbourne – including Casey, Frankston, Whittlesea, and Wyndham – are dominated by declining markets with locations where quarterly sales activity is trending sharply downwards.
“Even in these outer areas, it’s difficult to find houses as low as $600,000 and higher interest rates are compounding the lack of affordability.”
