A ‘cracking’ start to 2024 with strong weekend property auction results

Australia’s population growth hot spots are mostly affordable property markets on the outskirts of major cities and in regional areas, according to an analysis by PropTrack. But homes may not remain affordable for long, with most of these areas recording above-average price growth over the past five years.

Australia’s population grew by 2.5 percent to 26.8 million people over the 12 months ending 30 September, according to the latest figures from the Australian Bureau of Statistics (ABS). This was an annual increase of 659,800 people, with migrants making up 83 percent of the increase.

REA economist Megan Lieu said home prices in Australia’s population growth hot spots are growing at an above-average pace due to strong buyer demand. However, median prices in the SA3 regions she analysed are still more affordable than their nearest capital cities or major regional cities.

Wyndham, on the western edge of Melbourne, recorded the strongest population growth over the past five years with almost 41,000 more people living there today compared to June 2018. In NSW,  Blacktown–North in western Sydney had the highest growth with almost 36,000 new residents. In Queensland, Ormeau–Oxenford in the Gold Coast’s northern suburbs gained almost 28,000 new residents, with Ms Lieu noting it was a popular market with interstate and international migrants.

Ms Lieu said the worst housing affordability in three decades may be driving population growth in areas with lower median values.

“A potential factor contributing to this trend is that homes in a majority of these regions are generally priced lower than their broader greater capital city area (GCCSA),” Ms Lieu said. “This is evident when we look at the current median sale price of homes in these SA3s. Over 60 percent of them sold for less than the median in their respective city or regional area.”

Ms Lieu said other drivers of these areas’ strong population growth could be local councils zoning large swathes of land for home development.

“They tend to be in peripheries of cities where more new homes are being built relative to other areas. The increase in the supply of homes could be contributing to more competitive pricing.”

However, these competitive prices are attracting more demand than supply, leading to strong price growth. “All except four of the SA3 regions have experienced larger price growth in the past five years compared to their corresponding city or regional area,” Ms Lieu said.

The price growth differential is more than 20 percent in some regions, such as Rouse Hill-McGraths Hill in Sydney, Ormeau-Oxenford in Queensland and Fleurieu-Kangaroo Island in South Australia.

Median house prices have moved up dramatically in many of the individual suburbs within the SA3 population hot spots. For example, the median house price in the suburb of Ormeau on the Gold Coast in Queensland is $830,500, according to PropTrack data. It has risen 7.9 percent over the past 12 months and skyrocketed 68 percent over the past five years. The median house price in the suburb of Rouse Hill in north-west Sydney is $977,500, down 2.5 percent over the past year but up 30 percent over five years. The median price in the Melbourne outskirts suburb of Wyndham Vale is $585,000, up 2.5 percent over the past year and 26 percent over five years.

Another factor driving strong price growth may be the increasing lifestyle appeal of these particular areas over the past five years. For example, Ormeau is close to Westfield Coomera, which opened in 2018, and has benefitted from numerous M1 road upgrades between Brisbane and the Gold Coast. Rouse Hill has its own station on the Sydney Metro Northwest rail line, which began running in 2019.

Ms Lieu said it was likely that more Australians would seek cheaper homes in city outskirts areas and the regions as property values continue to grow amid a continued forecast housing undersupply.

“With supply unable to meet continued strong housing demand, home prices may experience further upward pressure,” Ms Lieu said.

Top 3 areas for highest population growth over 5 years

NSW

Blacktown–North, Sydney 36,233 (new residents since 2018)

Bringelly-Green Valley, Sydney 27,741

Rouse Hill-McGraths Hill, Sydney 21,821

VICTORIA

Wyndham, Melbourne 40,833

Melton-Bacchus Marsh, Melbourne 35,818

Casey-South, Melbourne 33,191

QUEENSLAND

Ormeau-Oxenford, Gold Coast 27,719

Brisbane Inner, Brisbane 16,465

Springfield-Redbank, Ipswich 15,326

SOUTH AUSTRALIA

Playford, Adelaide 6,997

Charles Sturt, Adelaide 6,410

Fleurieu-Kangaroo Island, regional South Australia 5,504

WESTERN AUSTRALIA

Swan, Perth 16,959

Wanneroo, Perth 14,885

Mandurah, regional Western Australia 11,156

TASMANIA

Hobart-North East, Hobart 2,723

Devonport, regional Tasmania 1,926

North East, Launceston-North East 1,728

Source: PropTrack, SA3 regions with highest population growth over 5 years