Aussie suburbs where properties are earning more than their owners
[ad_1]
Key takeaways
Australia’s national property prices reached a new peak in March, having lifted for 14 consecutive months in a row.
The latest data shows that property prices have increased 1.57% so far this year to sit 6.79% above March 2023 levels.
In almost 900 suburbs around the country, property earned more than the average worker in the year to February 2024.
The suburbs with the strongest property value increases were in premium pockets in capital cities, but solid price growth did occur in more affordable areas.
A relatively strong Australian economy, historically low unemployment rates, Federal and State Government spending, initiatives, and infrastructure projects, low levels of stock of properties for sale, historically low vacancy rates and skyrocketing rents, and a return of international demand for Australian property all contribute to strong property prices.
Australia’s national property prices reached a new peak in March, having lifted for 14 consecutive months in a row.
The latest PropTrack data shows property prices have increased 1.57% so far this year to sit 6.79% above March 2023 levels.
Compared to that 6.79% property price growth, wages grew at a (still impressive) 4.2% over the course of 2023.
This means that for many homeowners, their properties have generated more income than their own salary over the past year.
And as always, not all suburbs are equal.
PropTrack’s new automation valuation model (AVM) revealed the suburbs in each state where the median property price has grown by significantly more than the average wage.
What is the average wage in Australia?
According to the latest ABS data, the gross weekly ordinary time earnings for full-time adults is $1,888.80.
This translates to average annual earnings of $98,218.
Number of suburbs where property earned more than the average worker
So how many suburbs around the country saw property earn more than their owners?
Almost 900 suburbs!
The data shows that just shy of 900 Australian suburbs saw their median property prices grow by more than $98,218 in the year to February 2024.
And remember that the family home is exempt from the capital gains tax, so this value increase actually stretches even further than the average annual wage on a dollar-for-dollar basis.
Unsurprisingly, the suburbs with the strongest property value increases were in premium pockets in capital cities.
It’s just maths – areas with a higher median price, but with the same percentage increase, would see larger dollar value gains.
For example, of the top 100 Australian suburbs where properties saw the greatest annual gains in dollar terms, a whopping 87 were in Sydney – the state with the highest median price.
However, solid price growth did also occur in more affordable areas.
Here’s a rundown of the top 10 suburbs in each state.
Top 10 NSW suburbs where property has earned more than the average worker.
Property prices in New South Wales grew 7.77% over the year to February, according to PropTrack.
And the top earners are all located in Sydney’s most affluent areas, but western suburbs also made the very top of the list.
The eastern suburbs of Bellevue Hill and Vaucluse saw the highest year-on-year growth in property values, with an average increase of more than a million dollars.
Meanwhile, in the inner-west regions, houses in Strathfield and Abbotsford saw year-on-year price growth of $447,417 and $401,327, respectively.
Also out west of the CBD is Oatlands near Parramatta, which earned $312,909 for the year, and West Ryde and nearby Melrose Park which notched up $305,455 and $301,676 in price rises respectively.
Further, down the affordability scale, houses in Condell Park and Wiley Park in Sydney’s southwest still outperformed the average Australian wage, growing by $99,953 and $98,507 respectively.
Here’s the top 10.
Top 10 earners in NSW
| Suburb | Region | AVM 12 months ago | Current AVM | Change ($) |
| Bellevue Hill | Sydney – Eastern Suburbs | $7,917,472 | $9,230,311 | $1,312,840 |
| Vaucluse | Sydney – Eastern Suburbs | $7,957,341 | $8,980,058 | $1,022,717 |
| Dover Heights | Sydney – Eastern Suburbs | $6,137,873 | $6,944,833 | $806,960 |
| Rose Bay | Sydney – Eastern Suburbs | $5,620,247 | $6,125,406 | $505,159 |
| Strathfield | Sydney – Inner West | $3,114,452 | $3,561,869 | $447,417 |
| North Bondi | Sydney – Eastern Suburbs | $4,083,836 | $4,512,973 | $429,137 |
| South Coogee | Sydney – Eastern Suburbs | $3,375,920 | $3,802,614 | $426,695 |
| Bronte | Sydney – Eastern Suburbs | $5,034,836 | $5,448,932 | $414,096 |
| Abbotsford | Sydney – Inner West | $2,753,167 | $3,154,494 | $401,327 |
| Clontarf | Sydney – Northern Beaches | $4,977,224 | $5,378,500 | $401,276 |
Source: PropTrack/realestate.com.au
Top 10 VIC suburbs where property has earned more than the average worker
Overall Melbourne property prices grew by a relatively modest 1.33% over the year.
But in the exclusive inner-Melbourne suburbs of Toorak and South Yarra, houses still gained more than the average wage at $237,486 and $136,311 respectively.
Meanwhile, suburbs east of the city in Canterbury, Balwyn and Surrey Hills also saw house values jump by $160,638, $156,400 and $125,312 respectively.
Further east the data was also impressive.
House prices in Wheelers Hill, Park Orchards, Lysterfield and Doncaster East increased $115,706, $103,194, $101,332 and $99,385 respectively over the year, all more than the average Australian wage.
Top 10 earners in Victoria
| Suburb | Region | AVM 12 months ago | Current AVM | Change ($) |
| Toorak | Melbourne – Inner | $4,148,336 | $4,385,822 | $237,486 |
| Canterbury | Melbourne – Inner East | $3,121,281 | $3,281,919 | $160,638 |
| Balwyn | Melbourne – Inner East | $2,702,699 | $2,859,099 | $156,400 |
| South Yarra | Melbourne – Inner | $1,891,053 | $2,027,363 | $136,311 |
| Surrey Hills | Melbourne – Inner East | $2,163,709 | $2,289,021 | $125,312 |
| Mont Albert | Melbourne – Inner East | $2,077,778 | $2,200,017 | $122,239 |
| Wheelers Hill | Melbourne – South East | $1,301,619 | $1,417,325 | $115,706 |
| Balwyn North | Melbourne – Inner East | $2,102,890 | $2,214,560 | $111,670 |
| Middle Park | Melbourne – Inner | $2,682,799 | $2,790,123 | $107,325 |
| Park Orchards | Melbourne – Outer East | $1,900,536 | $2,003,730 | $103,194 |
Source: PropTrack/realestate.com.au
Top 10 QLD suburbs where property has earned more than the average worker.
Properties on the Gold Coast have been the strongest performers over the year to February.
Houses in Surfers Paradise, Mermaid Beach, Palm Beach and Coolangatta made the top 10 for the state after earning $321,410, $278,103, $275,816 and $260,040 over the year, respectively.
Brisbane, which recorded an impressive 12.16% price growth over the year, also has suburbs with top-performing houses, mostly in inner-city pockets of Clayfield, Hawthorne and East Brisbane, where houses grew by $236,126, $232,384 and $226,221 respectively.
Further out in the southwestern riverside suburb of Mount Ommaney, houses still earned $98,841.
Meanwhile, in the Logan suburbs of Browns Plains and Loganlea, houses earned $106,252 and units earned $102,602 respectively.
Top 10 earners in Queensland
| Suburb | Region | AVM 12 months ago | Current AVM | Change ($) |
| Surfers Paradise | Gold Coast | $2,057,039 | $2,378,449 | $321,410 |
| Mermaid Beach | Gold Coast | $2,464,819 | $2,742,922 | $278,103 |
| Palm Beach | Gold Coast | $1,363,080 | $1,638,895 | $275,816 |
| Coolangatta | Gold Coast | $1,323,049 | $1,583,089 | $260,040 |
| Clayfield | Brisbane Inner City | $1,493,585 | $1,729,710 | $236,126 |
| Broadbeach Waters | Gold Coast | $1,876,179 | $2,108,972 | $232,793 |
| Hawthorne | Brisbane Inner City | $1,706,439 | $1,938,823 | $232,384 |
| Currumbin | Gold Coast | $1,309,467 | $1,541,369 | $231,902 |
| Paradise Point | Gold Coast | $1,429,435 | $1,657,424 | $227,990 |
| East Brisbane | Brisbane Inner City | $1,180,882 | $1,407,103 | $226,221 |
Source: PropTrack/realestate.com.au
Top 10 SA suburbs where property has earned more than the average worker.
In South Australia’s capital, Adelaide, property prices rose 12.76% over the year, with properties around the city’s affluent inner ring and coastline earning the most.
Houses in Glenelg South, Glenelg and Glenelg East earned $269,866, $209,715 and $186,342 respectively over the past year.
Meanwhile, houses in the leafy inner Adelaide suburbs of Malvern and Toorak Gardens earned $240,269 and $204,202 respectively.
Looking at more affordable suburbs, houses in Marion and Craigburn Farm in Adelaide’s south grew by $98,648 and $98,615 respectively, still more than the average Australian wage.
Top 10 earners in South Australia
| Suburb | Region | AVM 12 months ago | Current AVM | Change ($) |
| Glenelg South | Adelaide – South | $1,501,192 | $1,771,057 | $269,866 |
| Malvern | Adelaide – Central and Hills | $1,844,195 | $2,084,464 | $240,269 |
| Glenelg | Adelaide – South | $1,142,645 | $1,352,360 | $209,715 |
| Toorak Gardens | Adelaide – Central and Hills | $2,068,499 | $2,272,701 | $204,202 |
| Glenelg East | Adelaide – South | $1,115,137 | $1,301,478 | $186,342 |
| Hawthorn | Adelaide – South | $1,483,552 | $1,669,345 | $185,793 |
| West Lakes | Adelaide – West | $903,142 | $1,082,756 | $179,614 |
| Kingswood | Adelaide – South | $1,383,837 | $1,563,269 | $179,432 |
| Highgate | Adelaide – Central and Hills | $1,334,036 | $1,506,522 | $172,486 |
| Fullarton | Adelaide – Central and Hills | $1,273,774 | $1,440,633 | $166,859 |
Source: PropTrack/realestate.com.au
Western Australia
Over in Perth, property prices increased by an impressive 16.32% over the past 12 months – the strongest gain of all the capital cities.
This meant that houses in Perth’s western coastal suburbs of Cottesloe and Swanbourne earned $262,394 and $230,221 over the year, and those in the affluent inner city suburbs of Dalkeith recorded growth of $217,600.
Even in the more affordable pockets of the city, houses in Manning, just south of Perth’s CBD, and Merriwa in the city’s north earned $107,591 and $99,324 respectively.
Meanwhile, those in West Beach in the southeastern WA town of Esperance earned $98,529, still just ahead of Australia’s average wage.
Top 10 earners in Western Australia
| Suburb | Region | AVM 12 months ago | Current AVM | Change ($) |
| Cottesloe | Perth – Inner | $2,933,774 | $3,196,168 | $262,394 |
| Swanbourne | Perth – Inner | $2,137,655 | $2,367,875 | $230,221 |
| Dalkeith | Perth – Inner | $3,232,117 | $3,449,717 | $217,600 |
| Winthrop | Perth – South West | $1,048,271 | $1,261,281 | $213,010 |
| Coolbinia | Perth – North West | $1,444,209 | $1,651,825 | $207,616 |
| Applecross | Perth – South West | $1,900,723 | $2,104,030 | $203,308 |
| Claremont | Perth – Inner | $1,614,380 | $1,799,503 | $185,123 |
| North Coogee | Perth – South West | $1,374,808 | $1,558,980 | $184,172 |
| Murdoch | Perth – South West | $856,647 | $1,039,624 | $182,977 |
| Darling Downs | Perth – South East | $907,011 | $1,082,654 | $175,643 |
Source: PropTrack/realestate.com.au
But it’s not all good news
PropTrack senior economist Paul Ryan warns that while strong price growth relative to wage growth is good news for some, it also makes entry to the property ladder even more unaffordable for struggling first-time buyers.
He also points out that investors and downsizers are likely the only ones to benefit from a strong uptick in prices.
“Renters are paying more, mortgage holders are paying more. So it’s not necessarily a good news story unless you’re fortunate enough to be downsizing in the future or these are investment properties,” he said.
Where are property prices headed next?
Ryan expects that price growth will start to naturally slow as affordability worsens further due to buyers’ budget constraints, meaning their annual earnings may start to dip:
“I think until we get interest rates normalising a little bit, there’s a natural barrier to further really strong growth.”
My thoughts are that Australia’s housing is currently so horribly undersupplied that I’ve rarely encountered a supply-demand inflection point like it.
This means locating an available property is already more elusive than finding the missing car keys.
And it’s only going to get worse.
I think there will be a combination of growth drivers that should lead to a period of strong property price growth in 2024 with a confluence of the following:
- Surging migration creates an unprecedented demand for dwellings.
- Very few new buildings are in the pipeline, and any new construction will have to be considerably more expensive to make it financially viable.
- A relatively strong Australian economy with historically low unemployment rates.
- Federal and State Government spending, initiatives, and infrastructure projects.
- Relatively low levels of stock of properties for sale.
- Historically low vacancy rates and skyrocketing rents.
- The security that interest rates have peaked and will eventually fall.
- A return of international demand for Australian property
A final note for investors
As always, these “short-term” high-growth suburbs aren’t necessarily the suburbs I recommend investing in.
That’s because when it comes to property investment, it’s most important to look for an investment-grade property in the ‘right area’ rather than chasing ‘top hotspots’ or growth areas.
But strong property prices and stark unaffordability do, of course, offer an astounding real estate investment window.
Sure, there are unknowns and risks ahead, but there are also five certainties for our housing markets now:
- Inflation will stick around a little longer than the RBA would like.
- Interest rates will eventually fall.
- The scarcity of dwellings for both purchase and rent will not go away any time soon.
- Rents will keep rising.
- Astoundingly good demographics and strong population growth will keep fuelling demand for housing.
These 5 profitable real estate tailwinds create a window of opportunity for investors before falling interest rates create a property market reset later this year.
Of course, I can understand your frustration if you see our property markets surging ahead and you don’t have the funds to get a foot on the property ladder.
But as I’ve said before, the best time to get into real estate was 20 years ago, and today is the second-best time.
But even before looking for the right location, make sure you have a Strategic Property Plan to steer you through the upcoming challenging times our property markets will encounter.
You see…property investing is a process, not an event.
Things have to be done in the right order – and selecting the location and the right property in that location comes right at the end of the process.
The fact is, the property you will eventually buy will be the result of a sequence of questions you will need to ask and answer and a series of decisions you’ll need to make before you even start looking at locations.
Long before we talk about a property or the right location with our clients at Metropole, we look at factors including their age, their timeframes, and the desired end results in other words, what do they really want the properties to do – are they looking for cash flow, capital growth, or a combination of both.
And that’s because what makes a great investment property for me, is not likely to be the same as what would suit your investment needs.
[ad_2]
