A joint study by Aussie Home Loans and CoreLogic has revealed the top 100 suburbs for capital growth across Australia over the past 25 years.
It makes for interesting reading because the past quarter century has been an extraordinary growth period in the history of Australia’s property market.
I was in the first few years of my real estate career back in the early 1990s and I’ve seen some dramatic changes since then that have all contributed to price growth.
There is certainly more awareness today around wealth generation, with more mums and dads using property as a vehicle for investment. According to the study, investment has risen from 20% of mortgage demand in 1993 to an historic high of 55% in May 2015.
Lifestyle elements, such as proximity to cafes, restaurants and public transport, have become key drivers in where people to choose to live and there’s been a huge surge in apartment living.
In the 2000s, the internet changed everything by creating a massive buyer audience for every home listed for sale. It encouraged buyers to look beyond their own neighbourhoods for better value and lifestyle, which raised competition for homes as ‘out of area buyers’ became more prevalent.
Significant economic reforms, massive population growth (especially migration) and a severe undersupply of housing in our major cities has also led to exceptional capital growth since 1993.
How exceptional, you may well ask?
Well, the Aussie/CoreLogic study shows national house prices have soared by 412% from a median of $111,500 in 1993 to $571,400 today. That’s annualised growth of about 6.8%. Melbourne beat the national average at 8.1%, as did Sydney at 7.6%.
Median apartment values have risen 316% from $123,800 to $515,600 today, annualised at 5.9%.
How about this to demonstrate change. Back in 1993, 98% of all houses sold nationwide were less than $400,000 in price and only 0.2% sold for more than $1 million. Today it’s a vastly different story, with only 29% of houses selling for less than $400,000 and 16% selling for at least $1 million.
Chief Executive Officer of Aussie, James Symond, said: “Our report clearly shows that housing continues to grow as Australia’s largest asset class, with the typical home owner showing average dollar growth in their investment at $18,400 a year over the last quarter century.”
With two out of three Australians living in a capital city, it’s not surprising to see 81 of the top 100 suburbs in a capital city. Melbourne led the way with 41, followed by Sydney 25 and Perth 12.
What might come as a surprise though, is 9 out of the top 10 suburbs were in regional areas, which just goes to show there is plenty of opportunity to make money in property outside our big cities.
The No 1 suburb was Suffolk Park near Byron Bay on NSW’s North Coast, where the median house price has risen from $74,250 to $1.185 million over the past 25 years.
Here are the first 50 suburbs. If you’d like to see the full list, go to www.aussie.com.au/25years
National Top 50
Best performing suburbs
Median house price growth 1993-2018
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