SYDNEY and Melbourne, it’s not all about you any more.
While prices in Australia’s two biggest cities aren’t actually going down, growth has definitely mellowed and now other hot spots across the country are taking shape. For the three months to January, median house prices were up 1.1 per cent and 2.9 per cent in Sydney and Melbourne respectively, but in other neighbourhoods price growth has been far more impressive.
According to data from CoreLogic there are a number of sleeper suburbs, mostly outside the big two cities, that are experiencing significant price rises.
In the heart of Adelaide, Kensington Gardens saw a 29 per cent jump over the same time period to a huge median house price of $1.0285 million — that’s almost two and a half times the South Australian capital’s overall median house price of just $425,000.
Nick Ploubidis, principal of LJ Hooker Kensington in Adelaide, said prices in the local neighbourhood were in a definite growth spurt.
“People don’t baulk at $1 million in these areas anymore, it’s what you’d expect to pay in Kensington and surrounds,” he said.
“We’re seeing Kensington Gardens achieving some great results, especially at auction, in some cases we’re seeing six figures over the reserve.”
Homes selling so far above the set reserve is a rare sight in Adelaide, according to Mr Ploubidis, especially considering the city is not considered a big auction market.
Mr Ploubidis said the neighbourhood was in high demand with families due to popular local schools, but added that investors were also showing a keen eye in the suburb.
“Investors are loving the returns you can get here. Especially with apartments, you can get a unit for under $400,000 and there’s very low vacancy,” he said.
With more bang represented for their buck, Mr Ploubidis said he had seen an influx of buyers from Sydney and Melbourne looking at Adelaide’s prestige market.
“It’s a good mix of investors, but still the majority are probably locals buying for their super portfolios,” he said.
But outside the major metropolitan areas there has also been good median house price growth in recent months.
CoreLogic senior analyst Cameron Kusher recently crunched the numbers on regional real estate to show people are leaving big cities in favour of a more affordable lifestyle.
“In general, coastal and lifestyle markets have dramatically underperformed in terms of value growth relative to capital cities over recent years while recently we’ve started to see values rise in many of these regions,” he said.
“This supports the increased demand for housing (with migration as a source) which in turn, often leads to increases in home value.
“Another factor contributing to this migration is likely to be the recent home value increases in capital cities which has resulted in a deterioration of affordability and forced many younger families to look for alternatives to living in the capital cities.”
A sea and tree change migration can be attributed to the 19.6 per cent price change in Federal in the Byron Bay hinterland according to local agent Tim Miller of McGrath Byron Bay.
“And I don’t really see any signs of things slowing down,” Mr Miller said of Federal where the 12-month median house price is $960,000.
“We’d have probably half our buyers coming from outside of the area, many from Sydney and the south east of Queensland, but there are also a number of buyers from Melbourne too.
“There have been a real mix of holiday buyers of late, but then there are the investors who are looking to maybe buy a place to rent out with the view to eventually living in it.”
Despite the leafy hinterland being a lesser known cousin of its glossier neighbour Byron Bay, Mr Miller said the bush had been beating the beach.
“The market around Federal and Bangalow has probably been really comparing well to the coast,” he said.
There have also been significant house price rises in a number of tiny towns, far from the well known lifestyle hot spots.
Cobram on the Victorian and NSW border is home to just 6000 people and has a 12-month median house price of only $245,000 after more than 100 home exchanged hands there last year. However the affordable town has gone through a 16.7 per cent price jump, one that is fuelled by Baby Boomers according to local agent Andrew Jenkins of Andrew Jenkins Real Estate.
“I suppose with a new retirement area opening up here that could be contributing to the statistics,” he said.
The border town, which is 254km from Melbourne and 67km from Shepparton, has become a hot spot for investors.
“The lower end of the market is popular because there’s a pretty good rental market here. We might not be breaking any records like the big cities, but we’re certainly not going backwards,” he said.
AUSTRALIAN SUBURBS BY CHANGE IN MEDIAN PRICE
Millfield, NSW 29.9 per cent – ($354,000 12-month median)
Kensington Gardens, SA 29 per cent – ($1.0285 million)
Ouyen, Vic 23.8 per cent – ($102,750)
Eugowra, NSW 20.9 per cent – ($223,750)
Spreyton, Tas 20.2 per cent – ($295,000)
Federal, NSW 19.6 per cent – ($960,000)
Minyama, QLD 19.5 per cent – ($980,000)
Bolwarra, NSW 19.1 per cent – ($542,000)
Palm Beach, NSW 19 per cent – ($2.5 million)
Kianga, NSW 18.4 per cent – ($423,750)
Keith, SA 18.2 per cent – ($130,000)
Erina, NSW 18 per cent – ($726,000)
East Jindabyne, NSW 17.2 per cent – ($597,000)
Kandos, NSW 16.7 per cent – ($157,500)
Cressy, TAS 16.7 per cent – ($210,000)
Cobram, Vic 16.7 per cent – ($245,000)
Essendon North, Vic 16.4 per cent – ($800,000)
St Huberts Is, NSW 16.2 per cent – ($1.032 million)
Dover Heights, NSW 15.9 per cent – ($3.5 million)
Greenwell Point, NSW 15.5 per cent – ($465,000)
North Warrandyte, Vic 15.3 per cent – ($643,000)
Fairfield, Vic 15.2 per cent – ($1.104 million)
Evans Head, NSW 15.2 per cent – ($512,500)
Munno Para, SA 14.4 per cent – ($254,000)
Palm Cove, QLD 14.4 per cent – ($743,000)
*CoreLogic data for the three months to January 2016