The past decade has been a whirlwind of change in the housing market across Australia.
The numbers don’t lie: in nearly one in three Sydney suburbs, house prices doubled in the past 10 years.
But what does this mean for the future of property investment?
Despite the sharp downturn during the APRA-induced credit crunch between 2017 and 2019 and the recent steep declines, data from CoreLogic as reported in the Australian Financial Review has shown remarkable growth in Sydney.
Of the 506 suburbs analysed, 163 experienced increases of more than 100%, with the upper north shore and the inner west leading the charge.
In particular, the upper north shore and inner west of Sydney have seen massive growth.
Suburbs like South Turramurra witnessed a jaw-dropping 151% increase in the past decade, as reported by CoreLogic.
Other suburbs like Burwood in the inner west followed closely with a 148% increase to $2.5 million.
The growth in St Ives Chase, Gordon, Turramurra, Strathfield, and Croydon has been nothing short of remarkable.
Several factors can be attributed to this growth - strong economic conditions, limited supply, and increased demand have driven prices higher.
The underlying land value for houses has also played a role, reflecting an overall lower supply relative to demand in the detached housing sector.
But Sydney isn't the only place seeing massive growth.
Adelaide’s suburbs, including Christie Downs, Ottoway, and Maslin Beach, have mirrored Sydney's success to an extent.
In Hobart, the trend has been replicated in five suburbs, as property values have soared.
Melbourne and Canberra have each had three suburbs where house values more than doubled. Mornington Peninsula suburbs such as Dromana, Frankston North, and Sorrento have seen an upward trend.
Nationwide, house prices in 12.1 per cent of all suburbs have doubled in the past decade, though unit values in only 2 per cent of all suburbs matched those gains.
Suburbs with the fastest house price growth in the past decade
|Median value ($)||10-year total change (%)||Annualised 10yr growth rate (%)|
|South Turramurra, NSW||2,392,118||150.9||9.6|
|St Ives Chase, NSW||2,691,702||147.6||9.5|
|Bellevue Hill, NSW||9,580,866||140.3||9.2|
|Allambie Heights, NSW||2,289,000||137.8||9|
Not one suburb in Brisbane has doubled in value over the last decade, but with the Olympics nine years away, and a healthy level of housing affordability, Brisbane is a market that is likely to punch above its weight over the next decade.
It will definitely benefit from all the infrastructure investment it will enjoy in the time leading up to the Olympics.
Perth has had a weak run of growth over the last decade, but the 20% drop in values between 2014 and 2019 has also made it the most affordable of the state capitals.
While the Perth market has performed strongly this year, it will require a better economic outlook to change its fortunes.
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Affordability constraints may be a barrier moving forward as house prices soar and the amount of income dedicated to servicing a new mortgage becomes even bigger.
It’s likely the price gap between houses and apartments will narrow.
CoreLogic research director, Tim Lawless suggests:
“This undersupply, together with affordability constraints deflecting more demand towards higher density housing options, could see the unit sector delivering an equal or better capital gain outcome relative to houses.”
Suburbs with the slowest house price growth in the past decade
|Median value ($)||10 year total change (%)||Annualised 10yr growth rate (%)|
|East Perth, WA||899,841||-15.9||-1.7|
While historical data may show us impressive growth, can these suburbs continue at this rate?
The media is full of commentators suggesting that housing is unaffordable and price growth cannot continue.
Having invested in property for over 5 decades I have heard these cries before.
Imagine you are an overseas visitor returning to Australia for the first time in 10 years - you wouldn't recognise any of our capital cities.
The way we grew our cities over the last couple of decades with significant urban sprawl won't work moving forward.
With the strong population growth we are going to experience over the next decade, particularly in our three big capital cities, I believe we will see a very different housing landscape once again with many of our suburbs being reshaped with medium and high-density dwellings.
And as always, cities will be fragmented with some locations doubling in value, while others won’t – but there is nothing new about this.