Coastal Housing Hotspots & National Price Growth Outlook
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
In a remarkable twist, CoreLogic’s recent analysis of Australia’s coastal housing market reveals that despite multiple rate hikes, cost of living pressures, and market uncertainties, over one-third (35%) of regional coastal markets reached record housing values by the close of 2023. The study, which meticulously examined 368 coastal markets located at least 50km from the nearest capital city CBD, unveiled a dynamic spectrum of property performances, spotlighting significant variations between markets on a national scale.
Western Australia took centre stage, dominating the list of top coastal suburbs with the highest annual capital gains. The coastal regions of outer metro Perth, especially Mandurah, secured the lead, claiming more than half of the top 20 spots. What’s fascinating is that every suburb on the top 20 list of highest-growth markets featured median values well under $1 million, emphasising the allure of a blend of value and lifestyle attributes.
While the coastal market showcased its resilience, challenges were not absent. Suburbs around the Richmond Valley in Northern NSW, such as Ocean Shores, Byron Bay, and Suffolk Park, experienced the largest drops relative to their COVID peak, signalling a potential overshooting of fair values during the pandemic. However, amid these challenges, one in three coastal markets still recorded values at a peak in December 2023. Queensland’s Wide Bay-Burnett region stood out, dominating the top spots for the largest gains since the onset of COVID, with values increasing up to an impressive 82.5% in some cases.
Notably, the Sunshine Coast played a significant role, with two suburbs making it to the top 20 list of the most expensive coastal markets. Noosa Heads and Sunshine Beach showcased the region’s prestige, with median dwelling values ranking among the highest nationally. Despite the challenges faced by some markets, the coastal housing landscape in 2023 painted a picture of resilience, evolution, and enduring appeal, especially in affordable, lifestyle-rich areas near major cities. The Sunshine Coast’s presence in the spotlight further emphasises the diverse and dynamic nature of Australia’s coastal real estate market.
In January, housing prices have exhibited a rather subdued start compared to December, as indicated by data from My Housing Market. The findings reveal that the median house price in our capital cities has maintained a stable position at $1,089,156. The prevailing deceleration in market conditions, which began towards the end of the previous year, has persisted into the new year, leading to a loss of momentum in capital cities—an occurrence not uncommon during this period. Despite this tapering growth trend, national housing prices have shown resilience, recording an 8.6% year-on-year increase.
Breaking down the city-wise performance, Melbourne witnessed a marginal decline of -0.2%, Sydney experienced a decrease of -0.4%, and Adelaide saw a dip of -0.7%. In contrast, Brisbane defied the trend, marking a 1.1% increase in housing prices in January. While unit prices experienced a minor downturn of -0.7%, they have maintained a positive trajectory with a year-on-year growth of 5.3%.
These figures might suggest a potential downturn in the market. However, the persisting shortage in property supply coupled with heightened demand driven by robust immigration numbers is poised to exert upward pressure on prices throughout 2024. Furthermore, if the Reserve Bank of Australia (RBA) opts to ease the cash rate later this year, it could potentially fuel a modest increase in prices.
Based on my current observations, it appears that the property market is currently in a phase of consolidation, taking a brief respite before potential future developments.