Lifestyle purchasers are joining the ranks of inner-city buyers influencing where home values rise around the country.
An analysis of the changes in home values in the 12 months to December 2015 has found suburbs at least 50km from the nearest city or town recording massive yearly increases in home values.
In New South Wales, Yellow Rock in the Blue Mountains recorded the second-highest increase in home values for the state at 43.8%. It was the only suburb in New South Wales’ top five list with a median value of under $1 million, coming in at $637,292.
Yellow Rock in the Blue Mountains… there’s been some lifestyle purchasing happening there.
Suburbs on Sydney’s North Shore and eastern harbour took out the other top spots, with Point Piper jumping from a median price of $2,122,673 to $3,080,820 to make the biggest rise in home values for New South Wales.
The tranquil location at Yellow Rock is luring in lifestyle purchasers.
In Victoria, Seville East in Melbourne’s Yarra Valley Ranges – a popular wine-making region – recorded the third-highest increase in home values at 33.8%. The median value in Seville East moved from $321,181 to $429,728, making it the lowest value suburb on Victoria’s list.
Like New South Wales, the remaining top suburbs in Victoria were sought-after inner-city spots, particularly towards the east and south-east.Deepdene, a former neighbourhood of Balwyn (which also made the top five) was the biggest mover, almost doubling its median value with a growth rate of 48%.
Tasmanian suburbs with the biggest value increases were also a broad mix of lifestyle destinations and inner-city areas. Sulphur Creek, on Tasmania’s north west coast, increased its median value by 17.3% making it the number one mover for the state.
In number three and four positions, rising inner-city suburbs North Hobartand Cremorne increased by 12.4% and 11.4% respectively.
With views of Sulphur Creek and Bass Strait, this Tasmanian coast propertyis the ultimate getaway shack.
Cameron Kusher, CoreLogic RP Data Analyst, says areas close to the major cities are always going to be high in demand. But the trend towards lifestyle purchasing played out in almost every state.
“In NSW, a lot of the cities on this list are inner-city or North Shore suburbs, and they will continue to rise in value,” Kusher says.
“Where you will see the weaker positions are in the outer more affordable ares.
“Yellow Rock in the Blue Mountains… there’s been some lifestyle purchasing happening there. That’s the only reason I can think as to why the market would be so strong for the year.”
In Melbourne, Kusher says the trend in home value growth is similar to Sydney, with premium housing markets remaining strong.“Particularly in Melbourne where there’s such a focus on being in the right school zone, people are paying top dollar to secure that kind of property.”
Home values continue to rise in Melbourne’s top school zones.
In Queensland, suburb home value growth trends were more varied. East Deep Creek, an agricultural town of Gympie, saw year-on-year home values accelerate by 24%, with mining town Quilpie close behind at 19.4%.
Cabarlah, a popular suburb of Toowoomba in the Darling Downs region, recorded the third-highest increase in home value growth at 19.3%.
Salisbury was the only inner-city Brisbane suburb to make the top five for Queensland, rising 17% in value.
Kusher says Toowoomba has been a steady market for years, and may continue to see growth as the southeast Queensland job market opens up.
Behind the broad-based rise: Capital city home values
The year-on-year increase of Australia’s combined capital cities was 7.6% in February, while the yearly change in value growth was 2.2% for the rest of the states in January.
Melbourne is still the number one capital city for home value rises with an annual growth rate of 11.1% in February. Sydney trailed behind at 9.5%.
Sydney has reached its peak level of growth and now it’s slowing
Kusher says by the end of the year both Sydney and Melbourne will slow their rate of home value growth.
“Melbourne began to slow (in November) and has flatlined for the last three months,” he says.
“It will still outperform Sydney, and the reason for that is that it’s still a lot more affordable.
“Sydney has reached its peak level of growth and now it’s slowing.”
Upper hand: Buyers in Sydney set to be better off in 2016
Vendors still have the edge over buyers in Sydney, although home values are beginning to steady.
Sydney’s position behind Melbourne in home value growth does not look secure for the rest of the year. Kusher says Hobart, Brisbane and Canberra will jostle for that second position.
“Hobart is really benefiting from the tourism sector,” he says.
“Also, last time Hobart’s housing market was really strong was because there was a lot of interstate migration from Victoria. We may start to see some more lifestyle purchasing in Hobart from Victorians as well.
“Home owners in Melbourne have a lot of equity in their homes and they’re starting to look at that type of lifestyle property.”
If Brisbane’s rate of home value growth surpasses Sydney, it will be because of increased job creation in the southeast corner of Queensland, Kusher says.
The nation’s capital will see home values continue to rise throughout 2016.
If Canberra rises up, it will be because the economy is picking up and retail trade is strong.
“We’ll start to see more housing demand coming into Canberra this year.”
Kusher says in Sydney and Melbourne, vendors still have the edge over buyers.
“The vendor position is improving in Canberra, and in most other places it is neutral. Perth and Darwin markets still favour the buyer.”
In Perth and Darwin, home values will continue to trend lower, says Kusher.
“The big reason those markets are struggling comes back to the resources sector, and how heavily reliant those markets are on that industry.
“People are leaving WA at their greatest amounts since the early 2000s – that’s all impacting and resulting on those value falls.”