House prices jumped to records across several affordable suburbs in Sydney’s outer ring areas over the past three months. Louise Kennerley
Homes in Sydney’s outer suburbs such as Campbelltown, Cabramatta and Abbotsbury that have hit record prices are poised to gain even more under demand-boosting policies proposed by Labor and the Coalition that could fuel a new housing boom, analysts say.
In Melbourne, suburbs already attractive to first-time buyers such as Box Hill, Officer and Clyde North – and which have also reached records – were likely to rise further, Tim Lawless, the research director of housing data provider Cotality, formerly CoreLogic, said.
“Even though the policies are very different across the two major parties, they are both very much focused on a specific segment of the market, being first-home buyers,” he told The Australian Financial Review.
“And even though there are some supply-side initiatives aligned with these policies, they’re well and surely outweighed by the demand side.
“So I’d be very surprised if we didn’t see some upward pressure on prices in those areas that are largely targeted by first-home buyers as they take advantage of the policies on offer.”
The comments, based on analysis of housing price data the Financial Review requested, strengthen concerns from analysts – with at least one calling it a “sugar hit” – that home-ownership policies pushed by the two major parties are setting the country up for another demand-led housing boom while doing little to resolve the chronic lack of supply.
House prices in nearly a third of all suburbs nationwide climbed to a fresh peak in the past three months as the market rebounded from its short and shallow downturn, the Cotality data shows.
Across Sydney, house values in more than one out of six suburbs jumped to a record, while unit prices rose to their highest peak in one out of eight suburbs.
Suburbs in the Blacktown district dominated the list, along with the outer south-west and pockets in the inner west.
In Melbourne, 3 per cent of all suburbs, mostly located in the inner east and north-west, posted new house price peaks, while 4 per cent of unit markets hit new highs.
Home prices were likely to get a further kick-along from any cut in interest rates, Lawless said.
“I think the boost in demand will probably be amplified if interest rates come down more quickly and substantially than we expected even just a couple of weeks ago,” he said.
“The expectation for sharper cuts is almost as good as the rate cuts themselves. It tends to boost confidence and a catalyst for more buyers getting back into the market.”
Ticket prices
Sydney’s most affordable suburbs – those particularly attractive to first-home buyers – including Hebersham, Dean Park, Willmot, Dharruk, Blackett, Treager, Lethbridge Park, Bidwill, Whalan, Emerton, Shalvey and Ropes Crossing, have all hit new highs in the past three months, according to Cotality.
House prices in those suburbs jumped by up to 2.6 per cent in the past three months and by as much as 11.7 per cent in the past year. Despite those healthy gains, their median is still sitting below $1 million.
Values also surged to new highs in Sydney’s outer south-west, such as Menangle Park, Mount Annan, Leumeah, Campbelltown and Rosemeadow, where they rose between 1.1 per cent and 6 per cent in the past three months. Even with those gains, their median house price remained below $1 million.
Further, house prices in Abbotsbury, Bonnyrigg Heights, Bossley Park, Cabramatta, Fairfield West and Edensor Park in Sydney’s south-west also hit records after lifting between 0.9 per cent and 4.3 per cent in the past three months, the data shows. Their median house values are now between $1.12 million and $1.48 million.
“Those areas are likely to have further pressure from the Labor Party proposal, because the 5 per cent deposit scheme does apply to all types of property, whether it’s established or new, and their medians are under the $1.5 million cap,” said Nerida Conisbee, Ray White chief economist.
Value gains haven’t been limited to the more affordable suburbs, however. House prices also rose to their highest level in pockets of the inner west and inner south-west including Enmore, where they increased by 5.3 per cent, Marrickville by 4.1 per cent, St Peters by 4.3 per cent, and Sydenham by 3.3 per cent. Those gains lifted the median values to between $1.7 million and $2.2 million.
Unit values also hit new peaks in Bankstown, Bellfield, Bellmore, Beverly Hills, Padstow and Oatley in the inner south-west, where they increased between 1.2 per cent and 3.8 per cent in the past three months.
In Melbourne, Box Hill and Blackburn North in the inner east, Meadow Heights, Coolaroo and Greenvale in the north-west and Officer, Hampton Park and Clyde North all posted record house prices in the past three months after gaining as much as 4.2 per cent.
Coming out of the woodwork
Warwick Gardiner, director and auctioneer at Melbourne-based real estate agency Jellis Craig, said the buyers were motivated by signs of a turnaround in the housing market.
“We’ve seen home buyers come out of the woodwork even before the rate drop in February, and they’re more confident rates will fall further and they’re ready to get back in,” he said.
In Adelaide, 59 per cent of all suburbs posted record house prices in the past three months, including Meadows, Crafers, Nairne, Mount Barker and Stirling, where they rose between 3.9 per cent and 6 per cent.
Across Brisbane, house prices in 56 per cent of all suburbs hit new highs, led by houses in Chelmer in the west where they climbed by 4.4 per cent to $1.9 million.
In Perth, median house values rose to a fresh peak in 30 per cent of all suburbs, including Cockburn Central in the south-west where they rose by 4.4 per cent to $727,562 and Wooroloo in the north-east where they lifted by 4.2 per cent to $756,755.
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