2016 is fast coming to a close. In the last weeks of the year we look back on the property market over the last 12 months; what we expected, what surprised us, and of course, what we can expect in the next 12 months.
MELBOURNE
Melbourne has seen very strong growth over 2016
Melbourne had a strong 2016 with considerably lower stock levels than 2015 and higher demand for quality stock within 15kms of the CBD pushing growth. While we are not expecting overall 2017 growth to match that of 2016, we do expect this trend to continue in the first quarter of 2017 and prices to stabilise in the second quarter.
Ardeer was a suburb that surprised us this year in terms of the growth that was achieved, and we anticipate that it will be one to watch in the next twelve months. The suburb provides a lot bang for buyers buck with larger block sizes for very affordable prices compared to other suburbs while still being close to the CBD.
The suburbs that exceeded our expectations in 2016
Ardeer: Up 30.3% to $495,000 from $380,000
Sunshine: Up 19.6% to $637,500 from $533,000
Brunswick East: Up 17.8% to $960,000 from $815,000
Suburbs we have our eye on in 2017
Houses
Under $600,000
Ardeer offers buyers large blocks with houses while still being very affordable. Also see: Mooroolbark
$600,000 to $800,000
Croydon is seeing the ripple effect of the eastern corridor, while having excellent access to amenities. Also see: Watsonia, Fawkner, Croydon, and Sunshine
$800,000 plus
Mordialloc is benefiting from buyers who want to be close to the water but don’t have the budget to buy closer to the CBD. Also see: Aspendale and Mitcham
Units
Under $600,000
Reservoir has excellent opportunities, but only in certain pockets. Being one of the largest suburbs geographically in the city, buyers need to be discerning as some areas are better than others. Also see: Croydon
$600,000 to $800,000
Heidelberg is a gentrifying suburb attracting buyers priced out of Ivanhoe. With good infrastructure including shops, schools, parks, hospitals and train station, expect Heidelberg to perform well in 2017. Also see: Preston and Mentone.
$800,000 plus
Newport is nestled between Williamstown and Yarraville and is benefitting from buyers being priced out of both. Newport is only 7km from the CBD and boasts plenty of period houses as well as more modern townhouses. Also see: Northcote and Highett.
Source: Price Finder
SYDNEY
Sydney saw the biggest increase in values of any capital in 2016
The Sydney market has grown at a slower rate than the strong growth levels we experienced in 2014 and 2015. However, the market has maintained steady growth in the popular areas of the city and, not surprisingly, we have seen higher than expected growth rates in suburbs neighbouring those where buyers were out priced in 2015.
Sydney has also experienced a significant decrease in listings across the board which has in turn has created competition in the more desirable suburbs among those with healthy budgets.
The suburbs that exceeded our expectations in 2016:
Eastlakes (houses): Up 27.8% from $1,150,000 to $1,470,000
Manly (houses): Up 23.5% from $2,275,000 to $2,810,000
Queenscliff (units): Up 19% from $821,500 to $977,500
Suburbs we have our eye on in 2017:
Houses:
Forestville, Belrose, and Frenchs Forest have median prices around $1,400,000 and have proximity to the CBD and beaches, as well as being central to the new hospital which is due for completion in 2018.
Although Thornleigh and Westleigh have median prices of around $1.2m, they still provide affordable, entry level buying for first home buyers in the right pockets.
Greenacre will offer good value for buyers in the outer suburbs of the inner west with houses up to $850,000 – $900,000. Greenacre is seeing thee ripple effect from neighbouring suburbs so expect competition.
Units:
Five Dock provides good buying opportunities for investors looking for two bedroom units up to $800,000 in smaller established blocks or up to $900,000 in newer blocks.
Russell Lea also still has some good buying for investors with up to $800,000 looking for something to buy and renovate or add value.
Canterbury is likely to be the next ripple effect suburb in the inner west, offering rail transport and good opportunity for entry level buyers. Two bedroom properties will fetch around the $650,000 – $750,000 mark, while one bedroom units will attract prices around $550,000.
Summer Hill and Dulwich Hill still has good buying for investors up to $850,000 being near the train line and close to the city
Source: Price Finder
BRISBANE
While growth has been more moderate than forecasted, Brisbane has enjoyed a sure and steady increase in property value.
Brisbane had steady growth in 2016, providing excellent affordability and returns for investors
The top end of the Brisbane market performed a little under anticipated ranges, while property in the mid-range has closed the gap for number of days on the market and lower discounting rates.
Lower stock levels than normal has been a feature of the Brisbane and other markets in 2016 and this has propelled growth due to tighter competition in sort after areas.
The suburbs that exceeded our expectations in 2016:
Corinda (units): Up 23.5% from $334,412 to $413,000
Paddington (units): Up 16.3% from $460,017 to $535,000
Sherwood (house): Up 14.9% from $767,624 to $882,000
Suburbs we have our eye on in 2017:
Expect the outer rings 20-30 kilometres to record sharp growth over the first quarter of the New Year and continue on. This growth will be motivated by buyers who have purchased in the 30-40km radius five or six years ago, built up some equity, and are now looking to move closer to the CBD.
Affordability in these areas is still strong but they benefit from more lifestyle options and greater access to transport hubs.
The Redcliffe Peninsula to the north of the CBD has a median price of around $425,000 and will return strong numbers into the New Year.
Redland Shire areas such as Ormiston, Redland Bay, Victoria Point, and Wellington Point to the south of the CBD will also see strong growth in 2017.
Recent improvements to access roads and shopping hubs will add value to these areas over the next 12 months.
In addition to these areas, suburbs favourable to lifestylers that have reaped the benefits of local development will also see strong growth.
Wynnum ($575,000) and Birkdale ($528,000) offer buyers opportunity in the mid-range budget, while Manly ($790,000) provides options up to the high $700,000’s. Buyers can find something more affordable in Thorneside at around $386,000.
Source: Price Finder
ADELAIDE
Adelaide had assured growth in 2016, with some pockets doing superbly
Adelaide had another steady and assured year for median growth YOY. Like Brisbane, Adelaide has proven an excellent option for investors who are looking for value outside of hot markets like Melbourne and Sydney.
Adelaide and South Australia is also being recognized as a superb place for owner occupiers. With gorgeous beaches close to the city and a vibrant cultural scene driven by world class restaurants and wineries, South Australia was recognized by Lonely Plant as one of the top five regions in the world to visit in 2017.
Expect to see continued growth in the inner city suburbs up to 10 kilometres from the CBD and around the inner beachside suburbs. In addition to that, areas that are benefitting from infrastructure upgrades and government contracts such as the Submarine contracts should also see increased activity.
The suburbs that exceeded our expectations in 2016:
Largs Bay (units): Up 45.28% from $265,151 to $385,000
Tranmere (units): Up 43.6% from $337,743 to $485,000
North Adelaide (houses): Up 36.13% from $955,180 to $1,300,000
Suburbs we have our eye on in 2017:
Linden Park to the east of the CBD offers buyers looking for quality investments good opportunities, particularly units. Units in the suburb have seen a 36.1% increase over the year up to $548,000.
Marden has also seen a big jump in prices in the last year, with house prices rising 13%. Just six kilometres from the city and with good amenities, the suburb has good opportunities for buyers looking for larger block that can be purchased and subdivided.
Semaphore is providing buyers looking for closer access to the beach with plenty to like. There has been lots of activity in 2016 with house values jumping 23% and units going up 22%. Minutes to the beach and with strong growth, Semaphore should provide good buying for both owner occupiers and investors.
Source: Core Logic