Australian Property Update – February 2024

Terry Ryder

Underperformers With Potential


Buyers who want to get in ahead of future price growth should target “under-performing” suburbs where growth hasn’t kept pace with capital city growth according to PropTrack. PropTrack analysed key enquiries on listings which show intent to buy, including emailing an enquiry, calling the agent or downloading documents. It says the data is a leading indicator of growing demand and therefore future price growth.

According to PropTrack there are still plenty of opportunities throughout Australia to snare properties in underperforming capital city suburbs, where demand is starting to grow. Senior economist, Paul Ryan says the underachieving suburbs that are most in demand are varied, and trends differ depending on the region or the city.

Kenthurst in Sydney’s northwest tops the list of suburbs with below-average price growth. It had the highest number of key enquiries per listing in Australia, while its median house price dropped by 7.3% in the past year. At the same time, values in Greater Sydney rose by 8.3%.

Brisbane’s top underperforming suburb with high enquiries was Sheldon, with just 6% growth in the past 12 months, compared to Brisbane’s growth of 10.5%. In Adelaide, Beaumont was popular with would-be buyers with its median house price up by 8.6% compared to Adelaide’s growth of 11% in 2023.

PropTrack says Melbourne suburb Coolaroo was in demand, it had price growth of just 0.3% while during the same period, Melbourne city-wide growth was 0.75%. In Perth, Carine had median house price growth of 8.2% compared to greater Perth growth of 15.5% and in Tasmania, Richmond was in demand with its growth down 10.1% compared to Hobart which was down by 3.5% during the same period.


Bank Of Mum And Dad The Norm

Almost three-quarters of buyers are using the “bank of Mum and Dad” to help them buy property. Economist, Carlos Cacho, of Jarden Australia, says surveying mortgage brokers reveals about 15% of all borrowers were using some form of family assistance to buy a home, receiving on average $92,000 to help them out.

Assuming the majority of them are first-time buyers, Cacho says this implies 75% of first-home buyers are receiving some sort of assistance from family to buy.This is a significant increase on 2017 when University of Newcastle research showed about 60% of first-time borrowers had help from family and in 2010 when it was just 12%.

“The true scale of it is potentially even larger when you look at the big capital cities. It certainly feels like it’s the key driver of the housing market,” he says. Australian Housing and Urban Research Institute (AHURI) analysis shows those with family financial support are twice as likely to buy than those without.

The increase in family assistance comes as home prices rose on average by 6.4% across the capital cities in 2023 and by 3.2% across the regions.


Where Affordable Properties Are

There are still plenty of places where buyers can secure something where mortgage repayments won’t break the bank. CoreLogic figures show there are 524 house markets and 584 unit markets where, based on the median household income and average mortgage repayments, buyers spend less than 30% of their household income on mortgages.

There are no house markets in Sydney where repayments would be less than 30% of household earnings. But in a continuing example of the affordability of Australia’s apartment market, there are 73 Sydney unit markets that meet the criteria. Perth has 60 house suburbs, Brisbane, 38, Melbourne, 17 and Adelaide, 12. CoreLogic research director Tim Lawless says buyers need to look at the lower end of the market to secure something that will not consume more than 30% of the household budget.

This often means buying a unit instead of a house, unless you are prepared to move well outside the CBD of some capital cities. Sydney units in Wiley Park, Lakemba and Carramar are in the affordable category while in Melbourne, house markets in Melton and Melton South require less than 30% of the average income to service a mortgage. Brisbane, buyers need to look to areas such as Toogoolawah, Laidley and Riverview. Adelaide’s northern suburbs such as Elizabeth North are affordable as is Medina in Perth’s southwest.


Market Fully Recovered

Property prices which dropped in 2022 have fully recovered with new figures showing the national median house value has hit a record high. Domain’s latest quarterly House Price Report shows the national median house value is now $1,094,539.
It says Sydney, Brisbane, Adelaide, and Perth have achieved new house price highs, after a short downturn in Brisbane and Sydney in 2022. The report shows that median house prices rose across most capital cities in the December quarter except Canberra (down by 3.5%) and Darwin (down by 1.2%).

Domain Chief of Research and Economics Dr Nicola Powell says a continuing lack of listings is driving price growth. Powell says it has been a strong start to the recovery and while she predicts further price growth, it will vary between capital cities.
The report shows that unit values have already picked up pace and increased by 2.3% in the December quarter.

Powell predicts Sydney will hit a median house price of $1.6 million this year and that the steep gains Brisbane experienced in the past year will continue. “(In Brisbane) Units have come off a very long period of underperformance because they’ve had such a heightened level of supply,” she says.

“It’s been really the hero days for units in Brisbane over the last couple of years.”



PropTrack senior economist Angus Moore

“We’re still seeing very strong growth in places like Perth, Sydney and Melbourne. So, we’re far from out of the woods for renters.”

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