Property prices have fallen from their peak around the country as consecutive interest rate hikes increase lending costs and dampen demand.
But while price falls are widespread, some suburbs have bucked the trend.
The sea- and tree-change trend has seen many Australians move to lifestyle or coastal suburbs where homes are larger and more affordable.
The surge of demand in these areas is driving strong competition, and holding up property prices… with some suburbs seeing a growth of as much as 60% this year alone, according to realestate.com.au using PropTrack data.
PropTrack economist Angus Moore said while prices are falling nationally, some areas are performing better than others, particularly in more peripheral parts of the city.
"These further out suburbs are more affordable and as interest rates rise and borrowing capacities fall for would-be buyers, we might see some people shift where they're looking to be a bit further out.”
And the strong demand for property in regional Australia has driven competition and raised prices, particularly in locations within commuting distance to major cities such as the Sunshine Coast, Gold Coast, Wollongong and Geelong.
The PropTrack analysis shows the suburbs in each state and territory with the highest annual growth in median sale prices in the 12 months to 31 August.
Inner city suburbs also feature in some of the top 10 lists, particularly in Hobart, Adelaide, Perth and Canberra.
Here’s the breakdown for each Australian state.
Austral in Sydney’s South West was the highest growth suburb for Greater Sydney over the past year, recording a 55.3% increase in its house prices to a new $1.08 million median.
In second place for Greater Sydney was Silverdale in Sydney’s Outer West and Blue Mountains region, where house prices jumped 48.5% to $1.27 million in the past 12 months.
Meanwhile, The Entrance, a Central Coast suburb, came in very close behind in third place thanks to its 48.3% increase in house prices to a new $1.09 million median.
In fact, four of the 10 suburbs on the list are located on the Central Coast.
But for units, the highest growth suburbs are closer to the CBD.
Sydney’s Eastern suburbs features twice on the list - Darling Point took the top spot as the city’s highest growth suburb for units with a 41.4% increase to $2.77 million over the past year, and Edgecliff unit prices rose 39.1% to $1.6 million over the same period.
But it was Bellbird, a small suburb on the outskirts of Cessnock in the Hunter Valley in regional NSW, which outdid every other suburb in Australia for house price growth over the past year, the data shows.
Bellbird's median house price surged by 59.5% to $630,000.
The always popular Byron Bay had the highest annual growth for apartments in NSW, with its median unit price up 54% to $1.295 million.
Moore said while the PropTrack Home Price Index showed prices in Sydney fell almost 1% over the past year, prices in the south west are up 7% and 6% higher in the outer west and the Blue Mountains.
Many outer suburbs in greater Melbourne are outperforming the inner city when it comes to prices, led by some lifestyle hotspots on the Mornington Peninsula and Macedon Ranges.
The top performer is seaside Safety Beach on the Mornington Peninsula, where the median house price is up 38.2% to $1.285 million.
The Gippsland town of Bunyip, right on the south-east edge of greater Melbourne, had 33% annual price growth.
Moore noted prices in Melbourne's south east, west and the Mornington Peninsula have held up a bit better than in the inner city over the past 12 months.
"Prices in the west and south east are still up 4% over the past year whereas prices in Melbourne overall are basically flat."
All of regional Victoria's top 10 had median house price growth above 40% and three were above 50%, led by the historic High Country village of Bright with a 53% rise to $1.225 million.
Close behind in second and third place for regional Victorian houses are two suburbs in Latrobe - Gippsland - Wy Yung had a 51.4% increase in house prices to $710,000 and Eagle Point’s house prices climbed 50.6% to $595,000 over the past 12 months.
And the Latrobe - Gippsland region was also home to the top two suburbs for unit price growth in regional Victoria.
Lakes Entrance unit prices climbed 40.3% to $425,000 while Moe saw its unit prices jump 35.3% to $230,000.
PropTrack’s data shows that it was suburbs on the Gold Coast and Sunshine Coast which recorded some of the strongest increases in prices over the past year, with other regional Queensland locations also recording high annual growth.
The median house price at Surfers Paradise jumped 53.3% to $2.797 million and Clear Island Waters, also on the Gold Coast, had a 52.6% rise to $1.95 million.
The Sunshine Coast topped growth in Queensland for units, with Sunshine Beach's median unit price up 45% to $1.64 million.
The data is unsurprising given the sea- and tree-change shift we saw accelerate over the pandemic - many Sydneysiders and Melbournians flocked north in search of more space and more affordable property in lifestyle suburbs.
"At least to date that shift in demand for these areas looks to be continuing. We are continuing to see prices in Brisbane outperform Sydney and Melbourne,” Moore said.
He added that the more affordable capitals of Brisbane and Adelaide are expected to continue to outperform in terms of prices, as people look for larger homes and relocate if they're able to work remotely.
Greater Brisbane's top 10 includes a few inner-city entrants such as riverside Hamilton, although suburbs further out from the CBD also feature.
Brisbane's highest price growth and most in-demand suburb for houses over the past year is Kenmore Hills, about 14km southwest of the CBD. Its median house price has jumped 50.2% to $1.51 million.
Inner-ring suburbs dominate Adelaide's highest-growth suburbs, although the list is topped by Elizabeth South in the outer north where the median house price surged by 56.8% to $290,000.
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Inner-city Erindale had annual growth of 55.9% to $1.715 million, and Clarence Park's median increased by 52.9% to $1.185 million.
All suburbs in Adelaide's top 10 list had annual price growth above 45%, including Kensington Park where the median house price now sits at $1.647 million.
Like Brisbane, Adelaide has benefited from people looking for larger homes in the more affordable capitals.
Adelaide is the strongest-performing capital city market over the past year with 18.6% annual home price growth, according to the Home Price Index.
"It's been driven by people wanting a bit more space which Adelaide can offer as a slightly smaller city, larger land parcels," Moore said.
"Adelaide is quite a bit more affordable than Sydney and Melbourne, so if you want to get a detached house or an extra bedroom it is far more achievable somewhere like Adelaide."
The Home Price Index showed regional South Australia was the only major market defying the widespread downturn in prices in August, hitting a new price peak after strong annual growth of 19.4%.
The historic mining town of Burra, on the edge of the Clare Valley, had the third highest annual growth nationally in median house prices, up 58.3% to $285,000.
The suburb also tops the list for the highest growth suburb in regional South Australia.
While still experiencing some increases, units in regional South Australia didn’t see quite the same price surges as elsewhere.
Mount Gambier had the largest annual price growth - of 10% - to $225,500.
Inner-city and middle-ring suburbs featured heavily in greater Perth's highest growth list, led by Mount Hawthorn's 32.6% annual increase that took its median house price to $1.28 million, the data revealed.
Other inner-ring suburbs on the list included North Perth, Mount Claremont and Wembley Downs.
North Beach's median house price rose almost 32% to $1.38 million while Cottesloe, home to the popular Cottesloe Beach, recorded a 25.5% growth to $3.056 million.
Perth home prices were flat in August, but prices rose by more than 8% over the past year.
Moore noted Perth did not have the same run-up in prices as other cities during the pandemic, partly because it recorded very steep rises during the mining investment boom in the early 2010s, however now it looks relatively affordable compared to some of Australia’s other capital cities.
Tranmere, on Hobart's eastern shore, recorded the second highest house price growth across Australia. Its median house price surged 59.3% to $1.3 million in the past year.
Other suburbs with strong growth included Carlton (up 49.8% to $726,000) and South Hobart, one of Hobart's and Australia's fastest-selling suburbs which had 48.6% annual growth in its median house sale price to $1.085 million.
Moore said Hobart was one of the particularly strong performers across the pandemic.
"We saw very brisk price growth through the back half of 2020 and in 2021 coupled with extremely tight conditions with very few listings for buyers to choose from and quite strong demand. That meant we saw prices grow very briskly in all parts of Tasmania," he said.
He added that market conditions in Hobart have shifted this year, with the total number of properties for sale now back above pre-pandemic levels.
Hobart prices fell in August but remain 10% higher than a year ago.
For regional Tasmania, suburbs in the Launceston and North East region dominated the list of suburbs with the highest property price growth.
In first place for houses was Port Sorrell in the West and North West of regional Tasmania where house prices have grown 46.4% to $735,000.
Darwin’s waterside suburb, Nightcliff, recorded a 56.5% annual price growth, ranking as one of the highest in Australia.
Nightcliff's median house price jumped to $1.029 million.
Neighbouring suburb Rapid Creek and the northern suburb of Muirhead both recorded annual price growth above 30%.
Red Hill led the price surges in Canberra, with its median house sale price jumping 54% to $2.625 million.
Throsby's median house price rose more than 48% to $1.077 million, while the rest of the top 10 all recorded strong annual growth of more than 30%.
While these highest price growth areas might make for a tempting investment, they aren’t necessarily the suburbs I would recommend investing in.
At Metropole, we always advise on the importance of investment-grade properties and locations, rather than chasing a hotspot or growth area.
That’s areas and properties which hold their value over the long term, rather than benefit from an uptick in demand.
But even before looking for the right location, make sure you have a Strategic Property Plan to steer you through the upcoming challenging times our property markets will encounter.
Because aside from remembering that you should focus your efforts on investment-grade properties and locations, you also need to remember that property investing is a process, not an event.
That means that things have to be done in the right order – and selecting the location and the right property in that location comes right at the end of the process.
And that’s because what makes a great investment property for me, is not likely to be the same as what would suit your investment needs.