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Australia’s Biggest Winners and Losers
October 13, 2011
Whilst 2011 has seen the property market across Australia flatten some suburbs have fared better than others. In most states, the more prestigious end of the market has experienced some of the biggest declines in median house prices whilst affordable areas have continued to show growth despite the challenging market conditions.
This article highlights the biggest winners and losers year on year in the property market with an inside view on why from our institute experts.
New South Wales
The situation in Sydney is representative of this general trend with more affordable areas such as Fairfield West and Liverpool East experiencing a strong growth year on year of 11% and 10% respectively.
Whilst at the other the other end of the market, suburbs such as Mosman and Manly have experienced the biggest declines of -8% and -13% respectively.
Tim McKibbin, CEO of the Real Institute of New South Wales believes, “Many of the biggest declines in median house prices have occurred at the upper end of the market. In times of economic uncertainty we usually see consumer confidence decline at the upper end of the market and thus these suburbs have experienced a correction in the median house price in-line with what is occurring nationally. We do however anticipate that these areas will stabilise and recover overtime as the economic outlook continues to improve for Australia.”
Tim added, “It is however also important to note that in some of the more expensive suburbs, the number of total sales recorded for the quarter have also declined, making it more difficult to calculate figures which are a true and accurate representation of the market in these areas.”
The data in Victoria paints a similar picture with the lower end of the market continuing to show promise with suburbs like Cockatoo and Cranbourne North both experiencing some of the greatest year on year growth (16.3% and 13.7% respectively).
The suburbs which have experienced the greatest decline year on year are those in the million plus median price segment and include Armadale (-14.3%), Mont Albert (-14.2%) and Malvern (-12%) .
Enzo Raimondo, CEO of the Real Estate Institute of Victoria states, “The strongest demand is in the more affordable suburbs whilst buyers looking in the million plus segment of the market are well placed to find some lower prices this spring.
“The key reasons for this are that demand in the more affordable suburbs has been bolstered by population growth and inadequate supply whilst concerns with the global economy and stock market have caused the smaller segment of buyers in the upper end to hold back.”
In Western Australia the strongest growth also came in the more affordable suburbs – Ferndale (6.2%) and Maida Vale (15.3%).
David Airey, CEO of the Real Estate Institute of Western Australia believes, “Activity here might be coming from first home buyers taking advantage of the market downturn.”
The biggest declines in the median house price have been experienced in areas like Bullsbrook (-7.6%) and Mount Lawley (-16.4%). David Airey states, “As the overall median price has come down while stock levels remain well above average, some homebuyers might reconsider those areas on the urban fringes because living a bit closer to town is now more of an option.”
Tasmania is heavily skewed as it has been a slow winter with volume of sales down in comparison to the other quarters – hence the results do not contain large samples to create a true and accurate view of the market.
Mark Berry, CEO of Real Estate Institute of Tasmania says, “Biggest winners, with the exception of Mount Nelson are primarily situated outside the main centres. Bicheno, Smithton & Geeveston have all achieved positive growth of 30.9%, 32.1% & 27.5% respectively.”
In terms of the biggest declines, Mark states, “Newnham has seen a 27.1% decline year on year. As a result it has become popular with investors and first home buyers looking for affordable housing.”
South Australia has recorded some very significant growth and decline in suburbs across the state. According to Petra Sprekos, General Manager of propertyDATA.com.au, “Suburbs close to the beach are still experiencing high demand with North Brighton & Glenelg East experiencing 51% and 36.3% growth respectively.”
When it however comes to the biggest falls in median prices Ms Sprekos said, “In Adelaide we are seeing some of the biggest declines in median house prices in areas such as Seacliff and Salisbury Heights, which have recorded year on year declines of -28.4% and -29.2% respectively. We believe as property prices have flattened, suburbs closer to the CBD have become more attractive to buyers, and as a result median prices in some of the outer areas have declined.”
Queensland experienced the most extreme fluctuations out of all states with growth rates spiking by over 50% in a number of suburbs. According to Dan Molloy, Managing Director of REIQ, “price changes in some suburbs over the year ending June 2011 can be attributed to the varying type and quality of the stock that sold over that period.” One such case is in Noosaville which experienced price growth of 63.6% to $900,000, however as Dan explains, “this was due to the higher than usual number of waterfront properties that were sold.”
Another outlier is Gladstone, which had a median price change of 51.4% to $545,000 in the same period, driven by the multi-billion dollar investment in mining that is bolstering growth in the region.
On the other end of the scale, Paradise Point on the Gold Coast recorded a fall of 54.4% to $590,750. However, this result is skewed by the larger proportion of more affordable properties located away from the suburb’s well-known waterways.