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10 markets reversing the property trend
Despite strong national growth grabbing headlines, not all suburbs are currently booming, with the pandemic continuing to drag down markets, an industry expert has revealed.
10 markets reversing the property trend
Despite strong national growth grabbing headlines, not all suburbs are currently booming, with the pandemic continuing to drag down markets, an industry expert has revealed.
According to REA Insights, many local areas are still being impacted by falls in tourism, international migration and youth employment issues.
Nationally, the market has shown strong growth, with the latest CoreLogic figures showing overall the housing market has increased by 2.1 per cent.
The strong growth rate has economists, including Commonwealth Bank’s Gareth Aird, predicting national house prices would rise by 16 per cent over the next two years.
According to Commonwealth Bank, national housing prices will lift by 9 per cent in 2021 and a further 7 per cent in 2022.
However, REA chief economist Nerida Conisbee highlighted to investors that not all markets are currently booming.
Largest price declines by suburb
12 months to January 2021
|
Type |
Median |
% change |
||
|
CAIRNS NORTH |
QLD |
Unit |
$220,000 |
-12% |
|
AUBURN |
NSW |
Unit |
$500,000 |
-12% |
|
REDFERN |
NSW |
Unit |
$852,500 |
-10% |
|
BURPENGARY EAST |
QLD |
House |
$562,500 |
-9% |
|
TOORAK |
VIC |
Unit |
$925,000 |
-9% |
|
CARLTON |
VIC |
Unit |
$350,000 |
-8% |
|
DALYELLUP |
WA |
House |
$350,000 |
-8% |
|
NEWPORT |
QLD |
House |
$775,000 |
-7% |
|
PARRAMATTA |
NSW |
Unit |
$570,000 |
-7% |
|
FREMANTLE |
WA |
House |
$840,000 |
-7% |
According to Ms Conisbee, some of these regions are being impacted by border closures that are seeing a spike in unemployment and falling rental yields.
“Many of the suburbs on the list are weak rental markets. This is particularly the case for those areas that are reliant on younger renters and those more exposed to hospitality, education and tourism, as well as areas where there are typically lots of students, both international and local,” she said.
“While regional Australia is the place to be right now, Cairns is yet to receive an uplift with prices still falling overall for the city, and Cairns North units being the weakest performer at a suburb level over the past 12 months.”
The chief economist pointed out localised factors as well as changing consumer preferences, post lockdown, could also be impacting these markets.
“Premium suburbs are overall doing very well, however Melbourne’s prolonged lockdown appears to have delayed Melbourne’s luxury recovery. Median prices for houses and units have declined in toorak,” she concluded.
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