Nearly every suburb in Sydney and nearly half of all suburbs in Melbourne have posted median house price gains of more than 50 per cent since the start of the five-year housing boom in 2012, research by LJ Hooker shows.
Australia’s most expensive suburb Point Piper posted a 176 per cent increase in prices, while Llandilo, a growing western Sydney suburb had a 164 per cent increase. Other strong performing suburbs in Sydney include Clareville on the northern beaches, Gosford on the Central Coast and Galston in the northwest.
Actual median prices in these areas stretch across a wide spectrum. Point Piper’s median price is $12.5 million while Llandilo’s is about $2.1 million, according to Corelogic.
In Melbourne, three suburbs, Princes Hill in inner-city Melbourne, Huntingdale in the southeast and Flinders on the Mornington Peninsula, doubled their median asking prices.
Median prices in these areas are between $1.1 million and $1.98 million.
LJ Hooker head of research Mathew Tiller said despite a slowdown in the two biggest markets, particularly Sydney where house prices have fallen 1.3 per cent in the three months to November, any further drop in prices “pales in comparison to the growth that’s been achieved in the past five years”.
“Even the suburbs that achieved growth at the ‘lower’ end, of around 25 per cent, it is a result some other capital cities would gladly accept,” Mr Tiller said.
“It’s this exceptional period of growth that will encourage more listings in 2018.”
Next year will be a year for buyers, Mr Tiller said. “The market should be favourable for buyers because there should be less competition due to lower levels of investor demand. In addition, there should more choice for all buyer types with more listings on the market.”
But sellers won’t miss out, even despitelower auction clearance rates, falling from highs of 80 to 90 per cent in the past five years to 60 to 70 per cent in Sydney and Melbourne in recent times.
“The market will be favourable for sellers because interest rates are expected to remain steady at the record low of 1.5 per cent. This means mortgages will remain affordable ensuring buyers, that have missed out over the past few years, will still be out in force seeking the right property,” Mr Tiller added.
“Nationally, 2018 should be a steady, moderate and consistent property market thanks to positive property market drivers. These past few years have strongly favoured sellers, but this will swing back to the middle in 2018 and be favourable for both sellers and buyers.”
While listings are expected to be higher, buoying a steady market, it is also a sign there are more sellers than buyers in the market or that seller expectations have not been met. This can likely put more downward pressure on prices, SQM Research lasted listings update show.
Also, not all residential classes will have a smooth year ahead with downturn expected to hit pockets of apartment markets in Sydney and Melbourne, Mr Tiller added.
“For instance, there are a number of inner-city suburbs in Sydney, Melbourne and Brisbane that have seen a large uplift in new apartment supply. These areas will be hit hard from the slowdown in investor demand, especially as projects reach completion,” he said.
“In other suburbs, where detached houses dominate, price growth should continue as the pent-up demand from upgraders and downsizers ramps up.”