While there has been astronomical house price growth across Australia this year, there’s still hope for potential home owners, with several capital city suburbs bucking the trend and seeing house prices fall.
The latest Domain Property Report highlights postcodes that have seen house prices fall as much as 13% over the 12 months to September, driven, in part, by the “Covid effect” of lockdowns, online auctions and border closures.
Not surprisingly, given the city has been under stay-at-home orders for most of the past year, Melbourne has seen the largest house price falls.
Topping the list is the inner-city suburb of West Brunswick, where the median house price fell 12.80% to $937,000.
North Melbourne values also took a sizeable hit, down 10.50%, with the median home setting buyers back $1.15 million, and nearby Alphington was not far behind, down 8.50% to $1.46 million.
Caulfield North, -7.70%, and St Kilda, -5%, round out the top five impacted postcodes in the Victorian capital, with the median home in these suburbs costing $2.1 million and $1.5 million respectively.
Domain chief of economics and research Nicola Powell said coronavirus and people’s desire to find more space as they worked from home, was a key reason behind the house price fall.
In good news though, all five suburbs have shown solid growth over the past five years, with St Kilda prices improving a sizeable 40% since 2016, providing a great opportunity for shrewd investors.
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The stand-out, however, is Cabramatta in the south-west, which showed a modest 2% decline to a median price of $730,000, maybe because it was a key “suburb of concern” during the June/August coronavirus outbreak.
Unlike its southern counterparts, Queensland has largely avoided the Covid blues. Add great weather and comparatively more affordable housing and it’s no surprise that Brisbane has become a mecca for those wanting to escape lockdown.
This is reflected in the total volume of houses sold over the September quarter, which reached a six-year high, while the median house price also set a new record at $702,455.
But there are still pockets of the city where prices are on the decline.
In the city’s north, Taigum properties lost the most value in the year to September, with prices down 9.3% to a median of $440,000, with Corinda, on a bend of the Brisbane River, down 3.7% to a median $860,000.
Slightly further afield, the median house price in Flinders View, a short commute south of the city, is priced at $415,000 after a fall of 5.4%.
Looking at South Australia – which outstripped Sydney, Melbourne and Brisbane with 5.6% growth in September – the Adelaide Hills suburb of Woodside was the biggest loser, with prices falling 9.9% to a median of $385,000.
Somerton Park, which despite its name is actually a beach-side postcode, had 5.6% cut off the median house price, falling below the one-million mark to $991,250, and in the northern suburbs, Evanston Park, lost 3.3% in value, with a median home costing $365,000.
Perth – the only capital to record negative growth – officially became the most affordable city to buy a house with prices falling 0.6% across the board, to a median of $598,601.
Leading the way was Applecross, where the 12.40% price fall was the second largest drop nationally. Mount Pleasant also declined in value, down 10.80%. These premium suburbs recorded medians of $1.18 million and $1 million respectively.
Dr Powell said significant falls at the top end of the market as conditions cool were not surprising.
“What’s really strong in the market cycle is you do get that ripple effect, when prices reach their peak, they start to come off – the upper end leads this,” she said.
“So, some of these more premium areas that have had double-digit price growth the past year could see falls while other areas moderate. It will be very interesting to see what the future holds.”
Hobart out-performed the rest of the country in the September quarter, with median home prices up another 10.8%, to a staggering 31.9% year-on-year; the strongest increase in 17 years.
It’s a similar story in Canberra, with prices rising 32.4% over the past year, representing a record $720 increase every day.
The increase in both cities was felt across the board, with neither having any postcodes in the negative.
Words by Erin Delahunty
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