Now 2023 is here, lets look at what is expected to happen across the Australian property market. Image – Canva.
  • Townsville and Wanneroo LGA the top two markets
  • Smaller capital cities such as Perth, Adelaide and Darwin set to perform strongly this year
  • Units in good locations set to perform well this year too

The more affordable smaller capital cities are set to dominate the property growth this year, suggests research from Hotspotting.

Yesterday, The Property Tribune spoke about the 10 property markets in Australia that are set to perform strongly this year. Townsville in Queensland and suburbs in the City of Wanneroo in Perth were the two top markets, thanks to their booming economies and relatively affordable price points.

“Perth is the nation’s most vibrant market at present where about three-quarters of suburbs are rising or consistency locations, led by the affordable end of the market,” noted Terry Ryder of Hotpsotting.

“Meanwhile, in regional Queensland, it is the centres outside of the southeast that have the stronger growth markets.”

While this covers individual markets, what about the market overall? What trends are expected nationally?

  1. Affordable areas dominate growth
  2. Perth and Adelaide dominate Top 100
  3. Units popular in good locations
  4. Decline pre-dates rate rises
  5. Real estate returns to local factors

1. Affordable areas dominate growth

Mr Ryder noted that throughout Australia, affordable locations are performing strongly, with Perth, Darwin and Adelaide leading the way in terms of growth markets, alongside some key regional centres.

“The strongest sectors in those locations are the most affordable suburbs. In the biggest cities, where markets overall are down, the cheaper areas continue to provide rising markets. This is true in Melbourne, Brisbane, and Sydney, as well as Canberra,” he said.

“Our National Top 10 Municipalities list is dominated by capital city areas which provide a degree of affordability in times of elevated prices – city prices remain 27 per cent higher than mid-2020 – and rising interest rates.”

2. Perth and Adelaide dominate Top 100

Each year, Hotspotting publishes a National Top 100 list of Supercharged Suburbs, which are all suburbs showing patterns of rising sales activity across three or more consecutive quarters.

“More than 40 per cent of the locations on our new Top 100 list are suburbs in Adelaide and Perth, which are two capital cities that continue to defy the downturn pressures seen in the biggest cities,” he noted.

Mr Ryder noted that by contrast Sydney, Melbourne and Brisbane only made up for 23% of the Top 100 locations in total.

Regional cities were far more prominent than the three largest Australian cities; regional Queensland has 12 locations on the list, headlined by Townsville.

3. Units popular in good locations

Mr Ryder said that another manifestation of the report – buyers seeking out affordable property – is increasing demand for city areas that offer units at a major discount compared to house prices.

“Sydney has been declining since mid-2021 but the Inner West and Canterbury-Bankstown remain busy markets. In the City of Melbourne, seven of the 10 suburbs in our analysis have rising or consistent sales levels,” he said.

“The inner-city unit precincts are defying the general decline seen in Brisbane since the start of 2022. With borders open and overseas migrants and students returning, demand from renters and buyers of units has risen – and vacancies have dropped markedly.”

Terry Ryder
Terry Ryder. Image supplied.

4. Decline pre-dates rate rises

Mr Ryder said the research shows clearly that the downturn markets were in decline even before the RBA acted in May.

“Sydney peaked in mid-2021, faded in late 2021 and slumped early in 2022. Melbourne, Brisbane and iconic regional centres like the Sunshine Coast and the Gold Coast started trending down in late 2021 or early 2022,” he said.

“The Gold Coast sales data shows the trend in action because in the six quarters since mid-2021, the number of suburbs with rising sales activity has been falling, so the downward pattern, starting mid-2021, is very clear.”

This may suggest that declining prices may continue regardless of the next monetary steps undertaken by the RBA.

5. Real estate returns to local factors

Lastly, Mr Ryder said that the tendency for property commentators and economists to generalise real estate markets – by discussing Australia as a single market – is impacting consumer’s knowledge of what is actually happening on the ground.

“This report has revealed countless examples of the reality that real estate is essentially a local affair, with markets within markets,” he said.

“Throughout Regional Queensland, for example, there are 130 locations classified as rising markets, 36 notable for their consistency, but 120 which are plateau markets and 19 classified as declining markets – all of them in the Sunshine and Gold Coast regions.”

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