Australian property prices surged in 2020 on the back of record-low interest rates and plentiful government homebuyer stimuli, and new data shows this trend has continued into 2021.
Economist at realestate.com.au Anne Flaherty said the property market has seen extremely strong price growth over the first half of this year.
“2021 came off the back of one of the most unusual years we have seen, in which the Reserve Bank slashed interest rates and people were saving more than double the portion of their income [due to international border closures] than they had pre-COVID,” Ms Flaherty said.
“Last year we saw a lull in market activity [during lockdowns], but this year we’ve seen people come back to the market in droves, and that high level of demand has pushed up property prices across the country.”
New analysis from realestate.com.au paints a picture of how the property market has fared in 2021 so far, and things are far from grim.
- Use the interactive below to see how well your suburb has performed in the first half of 2021
Data revealing the suburbs with the biggest growth in average estimated value for both houses and units across capital city regions, shows scenic suburbs further away from CBDs have experienced the biggest jumps in the first half of 2021.
“Inner-city areas are not as attractive as they once were because of the increase in people working from home,” Ms Flaherty said.
“There is a huge volume of demand in middle ring suburbs, and there are not as many properties coming up for sale as there are buyers to buy them.
“In a sense, people are realising they’re going to have to put in a really competitive offer if they want to stand a chance of competing. So, buyers are upping their offers just to be competitive and that’s pushing up values.”
Home values have surged in scenic suburbs
Looking at the suburbs with the biggest growth in average estimated house value in Brisbane, Milton and Teneriffe both experienced a 28% jump; Kangaroo Point and Tennyson both suburbs on the Brisbane river, had a 20% + hikes; and Laceys Creek, in Brisbane’s Moreton Bay region, recorded a 33% increase.
“People are getting pushed further and further out into outer suburbs now. Demand for properties is certainly outstripping the properties we have available to sell,” she added.
“Inner-city prices have made it so substantially difficult to buy in the inner city, so people are starting to look further out and those suburbs are starting to see prices that are more reflective of inner-city dwellings.”
The suburbs with the biggest jumps in average estimated unit value followed a similar ‘lifestyle’ trend, with Beaudesert, in Brisbane’s Scenic Rim region, tracking a 24% increase.
COVID buyers crave bigger homes, investors eye off inner-city units
A separate analysis of the most in-demand suburbs per capital city shows middle ring suburbs close to the CBD have also been a big hit with those seriously looking to buy a home in 2021.
Family-oriented Camp Hill was the most in-demand suburb (195,646 buyers) for Brisbane; and neighboring Coorparoo and Norman Park were the top suburbs on the inner south side. Hamilton and Wavell Heights were the best on Brisbane’s northside.
The data suggested COVID house hunters have been attracted to bigger homes with more space as they are spending more time at home during the pandemic.
“Homes in CBDs and in fringe markets tend to be quite small because the value of land is very high. With people working from home and spending more time at home in general, they are looking for bigger properties with more bedrooms,” she explained.
But inner-city suburbs are still appealing to certain buyers with the most popular suburbs for serious unit buyers all located in inner-city markets.
Brisbane (254,333 buyers) CBD ranked as top pick for unit buyers closely followed by New Farm and Kangaroo Point.
Homes are selling at breakneck speed, especially in Ferny Hills
Low supply coupled with strong buyer demand across most of the country is not only pushing up property prices, but also shortening the amount of time a property stays on the market.
In some suburbs, houses are spending just days on market before being snapped up, according to data from realestate.com.au.
These suburbs are also outer-suburban areas where COVID buyers can find bigger houses and more space, but the volume of supply is definitely a reason as to why homes in these suburbs are selling at breakneck speed.
“You’ve got growing demand for those properties in these suburbs that don’t come up for sale as often as properties in inner-areas do, which is why you would see days on market falling in those places,” Ms Flaherty explained.
“When properties do come up for sale in these suburbs, buyers are moving extremely quickly.”
Lockdown lulls will likely boost spring sales
The Australian property market is being marred by COVID-19 for a second year with several states, including the country’s two biggest markets in Melbourne and Sydney, currently in the midst of extended lockdowns.
This has put limitations on market activity as buyers cannot easily inspect properties, auctions have been moved online and many vendors have likely been spooked, Ms Flaherty said.