The Australian property market is heading for a “very healthy year” due to stamp duty changes and pent up demand, but there are some suburbs set for stronger growth than others.
The Covid-19 pandemic has drastically changed the way Australians live and work, and raised the possibility of full-time remote work in regional areas, the director of operations at real estate agency Upside, James Kirkland, said.
“Traditionally, Australians have found themselves living in areas that didn’t necessarily have elements of their ideal lifestyle – but did provide convenience for work,” Kirkland said.
“The pandemic opened up other options, and many may never return to a full-time centralised work week with a daily commute, as employers realise that technology can aid in making an alternative solution possible.”
He said Upside predicts modest property price growth over December before a “strong rebound” in 2021 as lower interest rates and soaring consumer confidence combine.
Top 26 suburbs for 2021
Upside’s annual State of the Australian Property Market Report 2021 highlighted the 26 hotspots it’s picking for growth in the new year.
Sydney’s St George area suburb is close to both the inner west and the eastern suburbs, and Upside predicts median prices will continue to rise through 2021.
Upside noted that while median home values in Bardwell Park were at $1.16 million at the beginning of 2020, they’re now at $1.35 million.
Upside said this suburb is one for young professionals seeking work-life balance.
“The rental market is thriving (40 per cent tenant rate) which means ample opportunity for selling when the time is right,” it said.
It noted that units have increased 4.3 per cent over the last quarter and 12.25 per cent year on year, with unit values now nearly back to their 2017 peak and set to surpass that in 2021.
This suburb is a 75 minute train commute into the Sydney CBD, but in a post-Covid world, this is unlikely to be a major problem, Upside said.
“The onset of hybrid workplaces opens up the opportunity for big spaces at affordable prices. The median home value sits at about $687,000 and the replacement Windsor bridge was put in in May, making the transition to outskirt life much easier.”
The pandemic didn’t just change Australians’ approach to lifestyle but also saw a boom in the mining sector as Australians bought up gold.
The Central West saw buyer demand ramp up as gold mining took off, and homes in this region saw prices jump 5.5 per cent in the last 12 months and nearly 30 per cent over the last five years, taking it into one of NSW’s top three regional suburbs.
The regional area is two hours from Sydney but has its own city and commercial hub.
“Situated with the glistening Tasman sea to one side, and the serene Hunter River on the other, there is a strong likelihood of a sea-changer finding a waterview property that is just right for them,” Upside said.
“Based on the last five years of sales, Newcastle has seen a compound growth rate of 3.3 per cent for houses, and 8.3 per cent for units.”
This suburb is 45km from the CBD and has a median house price of $392,000 and unit price of $320,000.
“The region is set to accommodate more than 40 per cent of metro Melbourne’s population growth over the next 40 years, and is set for revitalisation with the state government's investment in new metro lines to go through the heart of the suburb.”
This outer-north Melbourne suburb has seen compound growth of 7.5 per cent for houses over the last five years of sales, and offers a family-friendly environment.
“One of Melbourne’s largest metro activity centres, you can enjoy city life away from congestion of the city. With facilities such as the rail, tram and hospitals (with a strong populace of medical staff seeking to lease locally in apartment style living), this suburb is prime for investment picking,” Upside said.
Box Hill has seen 20.84 per cent capital gain over the last year, making it one of the top performing Australian suburbs.
Geelong was already taking off before Covid, seeing its population jump 14 per cent over the last five years. It’s also seen the $382.48 million Geelong City Deal boost its appeal along with first home buyer incentives encouraging people to look regional.
“With a diverse local economy, strong population growth and low unemployment rate at 4.43 per cent, Wodonga is a safe bet for investment,” Upside said.
“It's also much more affordable than nearby Albury. Houses for rent in Wodonga still see positive rental yields at 5.4%, and units at 6.4 per cent, while the vacancy rate remains slim at 1.58 per cent.”
Toowong is a growing residential neighbourhood and commercial hub with a $450 million village centre set for completion by 2023.
“[With] a premium selection of river-view apartments, the lifestyle sell is all but complete (particularly when you consider that units in this high demand market rent out for an average of $436 per week with a rental yield of 5 per cent),” Upside said.
“For houses in Toowong, the house median was $1,004,000 with a 12-month growth of 12.81 per cent.”
This suburb is 6km from the Brisbane CBD and is close to several popular schools. Camp Hill has a median house price of $908,000 and a five-year compound growth rate of 4.1 per cent.
This suburb is a 30-minute ride into the CBD and has a mix of multi-million living options, modern apartments, units and brick buildings.
It’s returned an average 14.20 per cent per annum over the last three years.
The Gold Coast’s Tugun is the definition of a lifestyle area and has the highest views per listing by suburb in regional Queensland after Covid-19.
“The median listing price for houses in Tugun sits at around $749k, having experienced a 7.84 per cent change over the past year (16.38 per cent over the past two years).”
Australian Capital Territory
“Home prices have been steadily growing ever since the Canberra Metro light rail came through the area last year. Serviced by three metro light rail stations with rapid access to the CBD, the airport and southern Canberra, there is no shortage of transportation options for those who still need to commute to the office,” Upside said.
“Gungahlin’s redevelopment saw the suburb record a jump of almost 7 per cent in two-bedroom unit prices over the last 12 months, and although houses in Franklin remain slightly out of reach for first-home buyers, it still remains a great priced area for investment for those who remained unaffected by the Covid downturn.”
Upside also noted that Franklin has mandatory connection of fibre optic cables to every home, meaning there won’t be any internet issues.
This is considered one of the fastest growing suburbs in the ACT and is close to community facilities and the Weston Creek centre.
It’s seen 9.3 per cent year-on-year increases in unit values to reach $530,000 in 2020, and as there isn’t a big pipeline of new properties coming onto the market, that growth is expected to continue.
This suburb has a similar lack of supply and huge demand for townhouses.
“With the city easily accessible via various Canberra region highways, the region finds itself populated with mostly professionals and families seeking peace and sanctity in lifestyle,” Upside said.
“With the median price for a house in Jerrabomberra being $822,000 and the advertised rent reaching $650, the gross rental yield for property investors calculates to be about 4.11 per cent.”
This suburb saw the largest year-on-year increase in sale price in Adelaide, with prices rocketing 34.6 per cent.
Now, the median home price is $1.022 million and the average rent is $660.
“Buyers are certainly intrigued: Realestate.com.au logged an average of 3,700 visits per property to Millswood compared to the average across South Australia of 1,200 visits per property.”
Port Elliot also saw demand increase during Covid-19. The suburb is 75 minutes from the CBD but close to the beach.
“In November, the median house price in Port Elliot sits at $487,000, having experienced a 9.8 per cent 12 month growth.”
“Looking for small town charm, but city amenities? Look no further than Mount Gambier, offering you all the creature comforts that you would want against a rural backdrop decorated with natural attractions such as the beautiful Blue Lake - at an even more attractive price point,” Upside said.
“Median houses in the area sit at $269,000, and the suburb has received the highest level of enquiries in South Australia from both first home buyers and investors post-COVID (Apr-Sep 2020).”
This suburb has family homes, villas, cottages and apartment blocks along with an active shopping strip.
It’s seen compound growth of 7 per cent of homes and 9.5 per cent for units over the last five years.
Blackmans Bay is 15 minutes from Hobart and has stunning views of the open ocean and mountainside.
“Take comfort in the idea of long term growth at a highly affordable entry point, with median property prices ranging from $635,000 for houses to $432,000 for units, growing at a compound rate of 8.4 per cent and 6.9 per cent respectively over the last five years.”
Launceston is described as an “ethereal mix of the old and the new” and is the subject of an agreement with all levels of government to see housing, infrastructure, education, transport, employment and health improve.
As it stands, the median property price over 2020 range from $487,000 for houses and $389,000 for units.
“Suburbs in Karratha are leading the price growth in Perth, recording a 61 per cent increase in sales activity quarter on quarter in 2020. This significant rise is attributed to the commitments made by mining companies to keep workers in WA since the onset of Covid-19,” Upside said.
“Medians dwelling values in Karratha also grew, seeing the largest increase of 8.1 per cent to $465,000 this year - but bargains are still to be had for those seeking a sunny outlook filled with weekend activities such as camping and laying by the beach (just a short drive away).”
Willagee’s proximity to Fremantle has meant its popularity has increased over the year with sales volumes increasing 18.2 per cent since the beginning of the year.
And with a small town feel, Upside predicts Willagee’s trend will continue upwards in 2021.
“Willagee has a 33.85 per cent rental population, and is currently sitting at a 0.63 per cent vacancy rate. Median prices over the last year range from $552,000 for houses, to $282,000 for units, while units rent out for around $350/week with a rental yield of 6.5 per cent.”
While Yanchep may previously have been considered a weekender destination, now it’s driving buyers.
It saw a 133 per cent spike in sales activity growth in October as buyers bought up land. Yanchep is 45 minutes from Perth and has a median price of $380,000 which Upside predicts will rise.
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