Rising Coastal Suburb Prices Predicted
Suburbs in Sydney are set for 23% growth in 24 months.
Suburbs in Sydney are set for 23% growth in 24 months.
Coastal suburb house prices in Sydney and the Gold Coast are tipped to climb over the next two years, a new report shows.
Data calculated by Select Residential Property predicts a rise of up to 23.05% in southern Sydney suburb Gymea Bay and 21.6% in northern beaches suburb Warriewood.
Based on housing supply and data indicators — which indicates a want for larger properties, close to the water and further from the CBD as driving factors – the median house price in Gymea Bay is set to rise by $311,711 to 1,664, 359 and in Warriewood by $360,310 to $2,025,330.
In determining the price trajectory for a suburb, Select Residential Property research director Jeremy Sheppard takes into account 17 demand and supply metrics, including auction clearance rates, vacancy rates, discounting levels, days on market and the number of properties available to arrive at a ‘suburb score’.
“The list of areas with the highest growth potential all have high demand relative to supply and all scored well above 80, which are historically reflective of double-digit growth rates,” said Mr Sheppard.
Across the country, house values in the Gold Coast’s Elanora and Worongary are also expected to grow over the next 24 months, indicating a potential 22% each. Elsewhere, Melbourne’s Keilor Park and Diamond Creek are to see 10% and Adelaide’s Cumberland Park is forecast to grow by 20.6%.
Queensland’s Airlie Beach and South Townsville are expected to see unit value drop by 8.5% and 8% respectively. Similarly, the report predicts South Bunbury and Bunbury in Western Australia is staring down an 8.6% and 7% drop respectively.
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This may be contributing to continually rising weekly rents
There has been a substantial increase in the number of Australians earning high incomes who are renting their homes instead of owning them, and this may be another element contributing to higher market demand and continually rising rents, according to new research.
The portion of households with an annual income of $140,000 per year (in 2021 dollars), went from 8 percent of the private rental market in 1996 to 24 percent in 2021, according to research by the Australian Housing and Urban Research Institute (AHURI). The AHURI study highlights that longer-term declines in the rate of home ownership in Australia are likely the cause of this trend.
The biggest challenge this creates is the flow-on effect on lower-income households because they may face stronger competition for a limited supply of rental stock, and they also have less capacity to cope with rising rents that look likely to keep going up due to the entrenched undersupply.
The 2024 ANZ CoreLogic Housing Affordability Report notes that weekly rents have been rising strongly since the pandemic and are currently re-accelerating. “Nationally, annual rent growth has lifted from a recent low of 8.1 percent year-on-year in October 2023, to 8.6 percent year-on-year in March 2024,” according to the report. “The re-acceleration was particularly evident in house rents, where annual growth bottomed out at 6.8 percent in the year to September, and rose to 8.4 percent in the year to March 2024.”
Rents are also rising in markets that have experienced recent declines. “In Hobart, rent values saw a downturn of -6 percent between March and October 2023. Since bottoming out in October, rents have now moved 5 percent higher to the end of March, and are just 1 percent off the record highs in March 2023. The Canberra rental market was the only other capital city to see a decline in rents in recent years, where rent values fell -3.8 percent between June 2022 and September 2023. Since then, Canberra rents have risen 3.5 percent, and are 1 percent from the record high.”
The Productivity Commission’s review of the National Housing and Homelessness Agreement points out that high-income earners also have more capacity to relocate to cheaper markets when rents rise, which creates more competition for lower-income households competing for homes in those same areas.
ANZ CoreLogic notes that rents in lower-cost markets have risen the most in recent years, so much so that the portion of earnings that lower-income households have to dedicate to rent has reached a record high 54.3 percent. For middle-income households, it’s 32.2 percent and for high-income households, it’s just 22.9 percent. ‘Housing stress’ has long been defined as requiring more than 30 percent of income to put a roof over your head.
While some high-income households may aspire to own their own homes, rising property values have made that a difficult and long process given the years it takes to save a deposit. ANZ CoreLogic data shows it now takes a median 10.1 years in the capital cities and 9.9 years in regional areas to save a 20 percent deposit to buy a property.
It also takes 48.3 percent of income in the cities and 47.1 percent in the regions to cover mortgage repayments at today’s home loan interest rates, which is far greater than the portion of income required to service rents at a median 30.4 percent in cities and 33.3 percent in the regions.
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This stylish family home combines a classic palette and finishes with a flexible floorplan