As many Australians wonder whether it’s a good time to buy property, one expert has looked at where prices have skyrocketed the most in the past decade.
Lloyd Edge, director of buyers agency Aus Property Professionals, has looked at Australian Bureau of Statistics data to find the five suburbs where prices have increased the most.
Three of the suburbs were located in Tasmania but inner city suburbs in Melbourne and Sydney also featured. Unit prices increased the most dramatically in Melbourne and Sydney, whereas the Tasmanian suburbs showed exceptional growth in house prices.
Mr Edge said the list reflected growth in undervalued areas close to the city.
For example, the three suburbs in Hobart of Moonah, Warrane and Mornington were all within 7km of the central business district (CBD).
In the past, he said these suburbs had featured some housing commission homes but recent gentrification had made them more desirable for young professionals and their families, who want to live close to their workplaces in the city.
Mr Edge said Tasmania’s property boost had also been supported by an improvement in the state’s economy around 2014.
“Extra jobs led to buyer confidence,” he said.
Interstate investors have also been attracted to the low entry prices on offer in Tasmania and the high rental yield, and this has also pushed up prices.
However, topping the list was Sydney’s Potts Point, which showed a median unit price increase of 105 per cent – the highest of any other suburb in Australia. Prices jumped over 10 years from $390,000 in March 2011, to $800,000 in March this year.
Mr Edge said this growth had been driven by changes to the city’s lockout laws in 2014, which impacted the nearby red light district of Kings Cross.
“When they introduced the lockout laws that put an end to a lot of the night life,” Mr Edge said.
“This meant Potts Point and Kings Cross were able to embrace more of a liveable and cosmopolitan feel.”
While other suburbs in Sydney have seen unit prices fall, Potts Point has been a noticeable exception thanks to changes in the reputation of the area. Mr Edge said the suburb also allowed people to live very close to the city, with harbour views.
“It’s lifestyle living near the city in a suburb that previously had a bad name as a red light district and drug haven,” he said.
While the biggest price gains in the past decade have been seen in inner city suburbs, Mr Edge believes there will be a different trend in the next 10 years, partly due to the impact of the COVID-19 pandemic.
“Following the pandemic and having the ability now to work from home, the trends of having to live in the city because people work in the city will change,” he said.
“There will be more growth in outer suburbs and even in regional areas.”
He said this was already being seen in areas along the coast of Queensland and NSW. Price growth in regional areas is already double that in capital cities.
“Over the long term I think that is where the most growth is going to happen,” Mr Edge said.
The price growth in areas like Potts Point might not continue and Mr Edge said unit prices may plateau, especially in areas with a lot of apartments, for example, the Sydney suburbs of Parramatta and Macquarie Park, and areas of inner city Melbourne.
“I have experienced this myself. I have units in Sydney that I have had trouble getting tenants for, for the first time,” he said. “There is less demand.”
“There is a need to decrease rent to get tenants in.”
However, this could actually be good if people wanted to buy and live in these areas.
“It might be a better bet to get an apartment in those areas but if you are an investor you probably wouldn’t advise them to buy there as there are better places to invest and get your returns.”
1. POTTS POINT, NSW
1km from CBD
Median unit price in March 2011: $390,000
Median unit price in March 2021: 800,000
Increase of 105 per cent
2. MOONAH, TAS
5km from CBD
Median house price in 2011: $282,000
Median house price in 2021: $516,000
Increase of 83 per cent
3. WARRANE, TAS
5km from CBD
Median house price in 2011: $240,000
Median house price in 2021: $406,000
Increase of 69 per cent
4. MORNINGTON, TAS
7km from CBD
Median house price in 2011: $267,500
Median house price in 2021: $438,000
Increase of 64 per cent
5. CARLTON, VIC
2km from CBD
Median unit price in 2011: $275,000
Median price in 2021: $367,000
Increase of 33 per cent
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