Property values in 20 east coast suburbs remained virtually flat over the last five years.

If you’ve been reading my blogs for a while you would know that I believe in investing for capital growth.

When you eventually retire the vast majority of your wealth, or the assets you own, will not be the rent you’ve earned, or the wages you’ve received, but will be the untaxed capital growth of your property investments which will have compounded over time.Property 2

Of course, that’s the reason why correct property selection is important as some properties will grow in value considerably more than others.

And, in general, this will relate to the property’s location which will do 80% of the heavy lifting.

Our long-term research Metropole shows that some suburbs outperform others by 50 to 100% over a decade, and I’ve written extensively about how we do our research.

So it did not surprise me when the latest Domain House Price Report found that median house prices in more than 20 suburbs in east coast cities remained virtually flat over a five-year period.

Source: Domain. Note: Median suburb property prices are for home sold over the year to September.
SUBURBS WHERE PRICES ARE AT 2015 LEVELS
State Suburb Region Property Type Median YoY growth 5Y growth
NSW Bankstown Canterbury Bankstown Unit $511,000 6.5% 0.9%
NSW West Ryde Upper North Shore Unit $625,000 7.7% 0.8%
NSW Westmead West Unit $552,000 -3.7% 0.4%
NSW Epping Upper North Shore Unit $830,000 9.2% 0.2%
NSW Sans Souci South House $1,230,000 -1.6% 0.2%
NSW Hornsby Upper North Shore Unit $645,000 0.6% 0.1%
NSW Strathfield Inner West Unit $700,000 4.7% 0.0%
NSW Burwood Inner West Unit $860,000 1.8% 0.0%
NSW Warwick Farm South West Unit $420,000 -1.8% 0.0%
NSW Haymarket City and East Unit $1,105,000 -8.7% 0.0%
NSW Riverwood South Unit $590,000 1.9% -0.2%
NSW Edmondson Park South West House $820,000 1.5% -0.4%
NSW Castle Hill Upper North Shore Unit $810,000 2.5% -0.6%
NSW Homebush Inner West Unit $650,000 0.0% -0.8%
NSW Auburn West Unit $550,000 -2.1% -0.9%
VIC Abbotsford Inner Urban Unit $560,000 13.1% 0.9%
VIC Southbank Inner Urban Unit $580,000 -2.5% 0.5%
VIC Doncaster Inner East Unit $555,000 -0.9% 0.0%
QLD Pacific Pines Gold Coast Nerang and Hinterland Unit $355,000 -1.4% 0.9%
QLD Mount Louisa Townsville House $369,500 11.3% 0.7%
QLD Hamilton Bayside North Unit $505,000 0.0% 0.0%
QLD West End Brisbane West Unit $549,000 -4.5% -0.1%
ACT Kingston Canberra Central Unit $532,000 -1.5% -0.1%
ACT Greenway Tuggeranong Unit $402,000 0.6% 0.5%

The misleading median

While median house prices are one of the most cited property market statistics as with any single measure there are some shortcomings that investors need to understand in order not to be misled with what’s really happening to house price values.

For example, if more properties are sold at the low price end of the market, they will pull the median price down with them and if more sales take place at the high end they will take the median along for the ride.

Changes in published median prices often don’t always mean that prices are actually rising or falling – only that more sales of lower priced or higher priced properties have occurred.

This means there are many other factors to take into consideration when evaluating the suburbs performance.

Digging deeper into the Domain statistics Sydney had the most suburbs where price remained flat or saw limited growth, with medians in more than a dozen suburbs virtually unchanged.

These were mostly in middle to outer-ring areas where a substantial amount of new development in recent years created an oversupply of apartments.

Haymarket, a suburb typically popular with international students, was the only inner-city suburb where prices were at 2015 levels.

Hard hit by border closures, it has seen reduced demand from buyers and renters, which has put downward pressure on prices – which dropped 8.7 per cent over the year to a median of $1,105,000.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

Metropole

A perfect storm is brewing for our property markets in 2021-22, and you can trust the team at Metropole to provide you with directionguidance and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award-winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


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