This Week in Real Estate – 22 December 2023
2023’s Top Performers
Western Australia dominated the list of the top-performing suburbs in Australia for 2023, taking out nine of the ten spots, according to data from PropTrack.
PropTrack economist Anne Flaherty says affordability was a big influence in 2023 with Armadale in Perth recording the highest median house price growth of 34% to bring its median to $404,000.
South Australia’s top performer was Elizabeth North, with growth of 30% to $366,000. It came in eighth position in the top ten.
Riverview ($464,000) in Ipswich had the strongest growth of 24% in Brisbane, while Denistone East and Clontarf shared top honours in Sydney with 17% growth to $2,332,000 and $5,523,000 respectively.
In Melbourne, Harkaway and Officer both had growth of 10% to bring their medians to $1,294,000 and $820,000 respectively.
Median house price growth was very low in Tasmania with Kingston Beach the best performer with its median up 2% to $882,000.
Berrimah in Darwin, record a 13% increase to $455,000 while in the ACT, Aranda was up 8% to $1,233,000.
Where Buyers Spent The Most
Buyers continued to pour big dollars into the housing market in 2023, with new figures showing which suburbs “earned” the most in the past 12 months.
In NSW the highest total value of house sales was in Mosman with 236 sold for a total of $1.461 billion while Macquarie Park led the unit market with $552 million in sales across 590 transactions.
In Victoria, Brighton had $893 million worth of house sales across 220 transactions and Inner Melbourne had 1386 unit sales worth $792 million.
Hope Island on the Gold Coast had the highest total value of house sales in Queensland with 295 changing hands for $624 million, and Brisbane City had $485 million worth of unit sales across 753 transactions.
Mount Braker in South Australia had 426 house sales worth a total of $289 million and Adelaide City had 591 unit sales worth $294 million.
In WA, Baldivis had 1154 house sales worth $609 million and Inner Perth had 606 unit sales worth a total of $284 million
Sandy Bay in Hobart had the highest value house (118 sales) and units (81) total value sales of $178 million and $70 million respectively.
Australia’s Rank On The World Stage
Australia has come in 18th position in the world for the pace of its property price growth.
The latest Knight Frank report, which analysed the property price growth in 56 countries says Australia recorded a 4.9% increase in house prices over the year to the third quarter of 2023.
Australia was one of 35 markets that experienced annual price growth, while just 21 of the 56 countries recorded drops in values.
Knight Frank head of residential research, Michelle Ciesielski, says the upturn in the latest quarter indicates strengthening price growth in several markets, including Australia, Ireland, Sweden, the UK and the US, despite rising interest rates.
“The resilience of house prices can be attributed to limited available stock, strong employment and robust wage growth,” she says.
Turkey has the most significant increase of 89.2% followed by Croatia (13.7%) and then Greece (11.9%).
Knight Frank’s global head of research, Liam Bailey, says the big issue for housing markets in 2024 will be low market liquidity.
“With sales volumes down by up to a quarter compared to their recent peaks- only a shift to lower interest rates will lift sales activity,” he says.
Builders Hard To Find
Infrastructure projects are driving up home building costs with Industry experts blaming a shortage of labour for the rising costs.
MCG Quantity Surveyors managing director, Mike Mortlock, says about a third of construction companies are reporting labour shortages.
Infrastructure spending is making the problem worse, according to the Reserve Bank of Australia which has warned government-funded road and rail projects are competing for trades and materials.
“Some (residential building) firms report the need to compete with infrastructure projects for materials and labour inputs,” it says.
“Firms have noted that demand is exceeding available capacity across the non-residential construction sector; this is keeping materials and contractor costs elevated.”
The Federal Government has $120 billion worth of infrastructure projects in the pipeline.
Infrastructure Australia warns there is a shortage of 229,000 workers looming across the infrastructure sector, which will add to ongoing cost pressures on everything from steel to quarry rocks, new homes, roads and power generation. Construction costs have risen 27% in the past two years.
