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Which Areas Are Booming in Australia's Property Market?
If you are looking to buy property in Australia, you may be wondering which cities are booming in the current property market. Canberra, Hobart, Adelaide, and Brisbane are among the most attractive cities to buy property in Australia. However, there is more to the Australian property market than just the property prices. Seeking out a reputable local buyers advocate especially when you are not local to the city you are buying in is a must and a good one will do more than just secure you a home at the right price, but will also have contacts to local builders, local removalists and even conveyancers to help with the legal paperwork.
The Brisbane property market is currently undergoing a transition, following in the footsteps of other markets across Australia. The median value of dwellings in Brisbane has recently hit a record high of $784,826, up almost 4% from the end of May. Moreover, the preliminary clearance rate has reached its lowest level since mid-November 2020, falling to 43.6 per cent.
The property market is currently feeling the effects of successive rate hikes, and Brisbane is no exception. The RBA's cash rates have increased by 2.5% this year. Despite the recent increase, the value of Brisbane property declined by -0.8% in August. This decline was accompanied by similar declines in other Australian capital cities, including Sydney, Melbourne, Canberra, Hobart, and Perth. The decline was largely due to a weakening buyer sentiment, which was further exacerbated by the recent rate hikes. Interstate migration data continues to show an outflow in other major states and an influx of Australians using Brisbane removalists to move to Queensland calling it their home.
The property market in Canberra has performed quietly well during the last few years. In one year, the median price of a house in Canberra rose by 25.5%, with an additional three percent increase in the June quarter. In the last decade, the median house price in Canberra has increased by six percent annually. The median price in June rose $96,000, or $1054 per day. This is the fastest price growth in almost three decades.
The ACT's housing market has also remained relatively stable and resilient during the recent economic downturn, despite a number of government projects. One of the major reasons for the stability of the market is the federal government's increased spending. Government procurement accounts for nearly one-third of the ACT's total economic output, and over 40% of the workforce is employed by government agencies. This means that there is an increasing demand for property in Canberra.
The Tasmanian state capital Hobart is experiencing a boom in the property market. The city's beautiful scenery and low housing prices have attracted Tasmanian buyers, who can take advantage of the city's low property prices. A senior property consultant for Petrusma Property says that the city's housing market is set to remain strong in the medium term. The median house price in Sandy Bay has reached $1.295 million, a record high for Hobart, and other inner-city suburbs are on the verge of hitting that milestone.
The median price for a house in Hobart has jumped by almost ten percent since the start of 2019. Hobart's prices are still significantly lower than those in Australia's capital cities, such as Sydney and Melbourne, which have soared at a faster pace.
Adelaide is one of the few capital cities where housing values are increasing in spite of rising interest rates. The city has seen a 3.6% rise in the last three months, adding $201,000 to the average home price. It is also the only city in Australia where sales have increased, while Melbourne and Sydney reported a decline. The biggest rise has been seen in the $400,00-$700,000 price band, which shows that first-home buyers are buying in the area.
The state's housing market is showing signs of recovery in 2021, with rental vacancy rates falling to 0.6 per cent and rental yields growing eight per cent. Despite the slowdown in growth, the suburb is still expected to reach a median price of over $500,000 in the coming year. Meanwhile, other suburbs in Adelaide are undergoing price drops, with some undergoing a five-per-cent decrease in value in the past six months. Adelaide continues to be a city that Australians are opting for away from the hectic lifestyle of Melbourne and Sydney and especially off the back of work from home orders. Australian are finally prioritizing where they chose to live as oppose to where to live for work. Prompting the demand for local Adelaide removalists to be booked in as far as 3 months in advance and interstate motorcycle transport in excess of 8 weeks in advance.
Despite its challenging recent history, Perth's residential property market is currently in an upswing phase, with tighter stock levels and rebounding buyer confidence contributing to sustained growth. According to QBE Insurance, the market is set to perform strongly in the coming years. While the overall property market in Australia is still experiencing strong growth, Perth has outperformed its counterparts in the past decade.
The recent interest rate rise has pushed up rents in Perth. Apartment rents in the city increased 10.4% this year to A$375 per week. The state's low vacancy rate has helped drive up demand for Perth's property. The vacancy rate is at its lowest point in over 40 years, and investors are likely to take advantage of these low rates in the near future.