Insurance insights

Which Australian cities boast the highest increases in home values?

As the property values rollercoaster continues its ride – exhilarating high in 2021, big dip in 2022, cautious ascent in 2023 – investors are keeping an eye on the top performing cities. So, which have been the strongest performers of late?

When it comes to property, investors generally look for a few key metrics and none more so than capital increase over time. The goal is usually to purchase a property that increases in value over time and delivers a good return on investment in the meantime. So, it pays for investors to keep an eye on the market and track which cities and suburbs are achieving higher prices.

That was then…

In 2021, Australia experienced the strongest annual growth in property prices ever recorded – an extraordinary 23.7 per cent according to ABS figures – but then values headed south in 2022. Off the back of challenging economic conditions, including successive interest rate rises from May of that year, property values began their sharpest decline in decades. The ABC reported that prices were down -5.2 per cent over 2022, and CoreLogic said the fall in home values was the sharpest since 1980.

This is now

By mid-2023 property prices were in recovery. Over the June quarter, combined capital city house prices rose almost four times faster than the previous quarter to produce the steepest gain since late 2021, and have now recouped roughly half of the value lost in the 2022 downturn, according to Domain’s House Price Report.

As the price recovery continues (August 2023 saw the sixth consecutive monthly increase, according to CoreLogic), keen investors will be watching the market closely to see how it continues to track and to identify the ‘hot spots’.

So where have prices increased the most recently?

In the past six months, several suburbs have recorded double-digit growth, according to API Magazine. The suburbs where houses have experienced the largest six-month growth in value were: Hurlstone Park (NSW), Fairlight (NSW), Smithfield Plains (SA), Kings Langley (NSW), Biggenden (Qld), Andrews Farm (SA), Elizabeth North (SA), Davoren Park (SA), Brookdale (WA) and Manly (NSW). For units: Forest Lodge (NSW), Kirribilli (NSW), Haymarket (NSW), Palm Cove (Qld), Christie Downs (SA), Millers Point (NSW), Point Piper (NSW), Lavender Bay (NSW), Brisbane City (Qld) and Newcastle West (NSW).

And over the longer term?

According to PropTrack, some metropolitan suburbs have had values double in less than two years. When it comes to houses, the suburbs where median sale prices had doubled the quickest were: Nirimba Fields (NSW), Humpty Doo (NT), Box Hill (NSW), Melonba (NSW), Vineyard (NSW), Grantham Farm (NSW), Red Hill (Vic), Lamb Island (Qld), Macmasters Beach (NSW) and Bardia (NSW). For units, hot spots included: Dawes Point (NSW), Salisbury (SA), New Norfolk (Tas), Campbelltown (SA), Geebung (Qld), Montrose (Tas), Millers Point (NSW), Rokeby (Tas), Midway Point (Tas) and Glenorchy (Tas).

How about over the past 10 years?

Patient property investors often do very well and can be less worried by the kind of short-term fluctuations experienced in some parts of the country in recent years. Over the last decade, Property Update indicated the top performing suburbs had been: South Turramurra (NSW), Burwood (NSW), St Ives Chase (NSW), Strathfield (NSW), Gordon (NSW), Bridgewater (Tas), Bellevue Hill (INSW), Allambie Heights (NSW), Turramurra (NSW) and Croydon (NSW). By contrast, the suburbs with the slowest price growth over the past decade were: Gray (NT), Driver (NT), Guildford (WA), East Perth (WA), Anula (NT), Wanguri (NT), Alawa (NT), Gunn (NT), Kiara (WA) and Woodbridge (WA).

And what does the future hold?

We don’t have a crystal ball, but property values are currently recovering, and a number of property pundits have predicted that the bottom of this pricing cycle has now passed. PropTrack’s Property Market Outlook
reports that national property prices are expected to increase between 2 and 5 per cent by the end of 2023, while the major banks are also forecasting price rises of up to 7 per cent.

A word about landlord insurance

With property values increasing, investors may be considering entering the property market or expanding their portfolios. If you’re looking at buying a rental property or two, be sure to protect your investment with the right landlord insurance.

Specialist landlord insurance covers common claims property investors need to make – it’s specific to the market and offers protection not only for events like storms, floods and fire, but also safeguards against loss of rent and tenant damage. Be sure to select the right policy for your circumstances, including whether it’s cover for a detached house or unit you require, and whether you and your tenant are entering a standard lease arrangement or an agreement applicable to the short-term market.

So, if you’re looking for landlord insurance, chat to a member of our Expert Care team – 1800 661 662.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.