Sydney’s southern suburb Kurnell outperformed all other capital city markets in the country during 2021, with median house prices soaring by 54.4 per cent over the year to $1.98 million, amid strong demand for bigger family homes and coastal locations, data from CoreLogic shows.
But Adelaide and Brisbane are set to take the reins in 2022 as Sydney’s housing boom starts to fade. CBA is forecasting Brisbane dwelling prices to climb by 9 per cent over the next 12 months, and Adelaide by 6 per cent.
Three suburbs on Sydney’s upper north shore – South Turramurra, St Ives Chase and Gordon – also made it to the top 10 fastest growing areas after median house prices jumped by 54.1 per cent to $2.66 million, 48 per cent to $2.93 million and 46.5 per cent to $3.74 million respectively.
“These markets are likely to be nearing peak growth rates for the current cycle if they haven’t hit them already,” said Eliza Owen, CoreLogic head of research.
“I’d expect as a result of hitting high values, coupled with the prospect of higher interest rates over the coming years, we will see these markets experience softer growth, followed by price falls when mortgage rates rise off the back of improved economic conditions.”
Four of Adelaide’s central and hills district suburbs also outperformed, led by Beaumont, where house prices climbed by 52.1 per cent to $1.65 million, Glen Osmond by 49.2 per cent to $1.5 million, St Georges by 49 per cent to $1.64 million and Wattle Park by 46.3 per cent to $1.32 million.
In Melbourne, St Andrews Beach on the Mornington Peninsula also made it to the top 10 with 49.1 per cent house price growth to $1.48 million, as well as Brisbane’s Clear Mountain on Moreton Bay, which rose by 47.1 per cent to $1.25 million.
“All the top-performing markets have relatively high price points for the greater metropolitan or regional market, reinforcing the usual cyclical patterns we would see that the ‘high end’ of some markets tend to have the highest peaks over the course of a cycle, before experiencing a larger decline,” said Ms Owen.
“More broadly, the presence of Adelaide suburbs reflects the surge in home values driven by a shortage of listings, constraints on the development of new housing such as land and building costs, and potentially interstate demand is also a driver here.”
Peter Koulizos, program director and master of property at the University of Adelaide, said Adelaide’s affordability and people’s ability to work from anywhere were among the biggest drivers for the strong interstate demand.
“We’re seeing more people moving to Adelaide but still maintaining their east coast jobs, so they’re earning a Sydney or Melbourne-sized salary while living in Adelaide, which makes it very compelling for many people,” he said.
“Even if you don’t have a job when you move in, it won’t be long before you find one because employers are screaming out for workers.”
Coastal locations in the regions also racked up strong gains led by NSW’s Shoalhaven Heads, which rose by 54.6 per cent to a median of $1.23 million, followed by Gerringong in the Illawarra region, which posted a 54.1 per cent rise to $1.83 million.
Three suburbs on the Gold Coast – Mermaid Beach, Miami and Mermaid Waters – also made it to the top-performing regions, with house prices rising between 49 per cent and 50.1 per cent.
“Unsurprisingly, top-performing regional markets are also those popular with holidaymakers, providing excellent return for short-term accommodation amid high levels of domestic tourism, as well as providing an escape from cities as a holiday home amid the pandemic,” Ms Owen said.
“Some of the high growth across popular sea-change markets like Shoalhaven Heads and Gerringong may also reflect early retirement decisions, brought forward by the pandemic disruption to the labour force. Most of these areas are still conveniently commutable to major metropolitan areas.”
But some suburbs have started to weaken, including the premium inner-city suburbs Armadale and St Kilda West in Melbourne, where house prices grew by just 4.2 per cent and 4.1 per cent in 12 months, respectively.
Perth’s south-western suburb North Coogee lifted by just 2.3 per cent, Karnup gained 1.7 per cent while Banjup rose by 0.7 per cent.
”It’s no surprise that the two inner-city suburbs of Melbourne were among the weakest performers in Australia,” said Mr Koulizos.
“Melbourne has had the most severe lockdown, with a lot of people looking to move out of the inner-city areas or Melbourne in particular, and looking to go to other states or regional areas.”
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/adelaide-brisbane-to-lead-housing-growth-in-2022-20220105-p59lya