- Posted By Koala Invest
The coronavirus outbreak and continued lockdowns and restrictions have done little to dampen Australia's property market.
Recent Domain data shows that property prices have reached record highs across all capital cities as the perfect storm for Australia's property market continues to roll out.
Australia's national median house price has climbed exceptionally close to the million-dollar mark at $955,927 - which is a huge 18.8% increase over the year, or 5.8% over the June quarter
And while units might be seen as a more affordable option for many trying to buy a home, they too have seen surges in prices nationwide.
The national unit price has risen 6.7% over the year, or 2.1% over the past quarter to a new median of $601,482.
And it's all happening amid low-wage growth.
But what is particularly interesting, then, is that there are price increases, for houses and units, in some Australian suburbs which are even exceeding the annual household wage for that area over the past 12 months, according to a new Domain report.
For houses, NSW has been the standout performer, having the highest proportion of suburbs where annual house price gains are more than the annual household income.
This was followed by Tasmania, Victoria, ACT, Queensland, South Australia, and Western Australia.
The below table highlights that, while the majority of suburbs across the country experienced house price growth over the last year, there's a big portion across the states where the annual household income is higher than the annual house price increase.
NSW was the only state to have proportionately more suburbs exceeding the household income than below:
Meanwhile, fewer suburban median unit prices increased more than the annual household income which reflects the underperformance of units versus national house prices over the past year.
Queensland had the highest proportion of units that gained more in price growth than the annual household income, followed by NSW, Victoria, and the ACT.
Top 20 suburbs where house price increases have surpassed average wages
The top 20 suburbs where house prices have grown more than the average annual salary are all in New South Wales and Victoria and are within the premium suburbs within cities and lifestyle coastal pockets.
"The constant presence and risks of lockdown, cheap interest rates, and changing property preferences amid the shift to working from home have defined the property landscape over the past year and a half," Domain says in the report.
"The premium-priced markets have led the way in house price growth causing the biggest gap between annual house price growth and annual wages.
"It's clear there is a strong demand for space in our cities and lifestyle regions."
Now that more and more Aussies are working from home on a more permanent basis, on top of the 20-minute neighbourhood, they're also looking for properties that have more space or a dedicated area or room to allow them to continue working from home.
And this is another trend I've also been tracking - the demand for larger homes.
It has also driven demand for lifestyle properties in sought-after locations like near the beach.
Remember the 20-minute neighbourhood!
Of the top 20 list, NSW suburbs easily dominate, being home to 18 suburbs of the list which are spread across areas in the city, the east, Northern Beaches, North Shore, and Byron Bay.
Dover Heights and Bronte, both in Sydney's eastern suburbs, take the top 2 spots on the list as the suburbs where house prices have risen faster than the average annual wage for residents in the area.
In these 2 suburbs, the difference between the increase in house prices and annual household income surpassed a whopping $1 million meaning they had an annual house price increase just over 7 times and almost 8 times the annual household income, respectively.
Northbridge, Seaforth, and Mosman make up the remainder of the top 5 spots.
Meanwhile, the Victorian suburbs of Somers and Blairgowrie, both on the Mornington Peninsula account for the remaining 2 suburbs on the list which aren't in NSW.
In total 13 suburbs saw house price growth more than 5 times the annual household income, and all are in the top 20:
|NSW||Dover Heights||2030||City and East||$1,265,000||$174,491||$1,090,509|
|NSW||Bronte||2024||City and East||$1,220,000||$153,767||$1,066,233|
|NSW||Bellevue Hill||2023||City and East||$850,000||$166,489||$683,511|
|NSW||Palm Beach||2108||Northern Beaches||$762,500||$121,528||$640,972|
|NSW||Byron Bay||2481||NSW Country||$655,000||$68,910||$586,090|
|NSW||Gordon||2072||Upper North Shore||$600,000||$133,157||$466,843|
|NSW||Killara||2071||Upper North Shore||$612,500||$145,880||$466,620|
|NSW||Avalon Beach||2107||Northern Beaches||$545,000||$123,025||$421,975|
|NSW||Pymble||2073||Upper North Shore||$576,500||$177,888||$398,612|
|NSW||North Balgowlah||2093||Northern Beaches||$565,000||$179,557||$385,443|
|NSW||Bilgola Plateau||2107||Northern Beaches||$520,000||$138,108||$381,892|
|NSW||Maroubra||2035||City and East||$479,400||$99,134||$380,266|
Top 20 suburbs where unit price increases have surpassed average wages
Unit price growth has continued to lag behind houses over the course of the Covid-19 pandemic but there are still suburbs that show consistent performance to homeowners where the annual unit price increase has far exceeded annual household income.
The top 20 performing suburbs for units are scattered across Australia, but NSW dominates the list with 12 suburbs, followed by Queensland with 6 suburbs and Victoria with 2 suburbs.
In NSW, most of the suburbs are within the northern suburbs and inner east of Sydney.
Queensland suburbs that made the list are all located on the Sunshine Coast.
Meanwhile, in Victoria, the suburbs of Blackburn and Geelong continue to show strong annual unit returns compared to annual household income.
Milsons Point in Sydney took the first spot with an extravagant $508,500 average price increase for its units over the past 12 months.
The increase more than doubles the average annual household income for the area -$178,867.
Little Bay, Fairlight, and Darling Point, all in NSW, also made the top of the list.
Queensland's Sunshine Beach was the only suburb outside of NSW in the top 5, coming in fourth place with a $212,500 hike in unit prices versus an estimated average annual income of $77,067.
|Suburb||Postcode||Region||Annual change in unit price||Estimated annual household income||How much more your home increased compared to your income|
|NSW||Milsons Point||2061||Lower North||$508,500||$178,867||$329,633|
|NSW||Little Bay||2036||City and East||$351,500||$117,498||$234,002|
|QLD||Sunshine Beach||4567||Sunshine Coast||$212,500||$77,067||$135,433|
|NSW||Darling Point||2027||City and East||$295,000||$170,749||$124,251|
|NSW||Rose Bay||2029||City and East||$250,000||$130,797||$119,203|
|NSW||Double Bay||2028||City and East||$260,000||$142,656||$117,344|
|NSW||Woolloomooloo||2011||City and East||$213,000||$103,279||$109,721|
|QLD||Coolum Beach||4573||Sunshine Coast||$181,000||$72,984||$108,016|
|QLD||Golden Beach||4551||Sunshine Coast||$108,000||$58,145||$49,855|
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