Aussie real estate boom: suburbs where home prices soared after interest rate hikes

Property prices have soared by up $450k in a range of “rate rise proof” capital city suburbs over the last year, with new data revealing value changes in every suburb.

Aussies chasing an affordable home this spring are being squeezed on two sides – their budgets are shrinking because of rate hikes, but the money required to land a foot on the property ladder is rising.

Alarming PropTrack data showed home prices in a range of once affordable suburbs on the fringes of Australia’s capitals have soared following the dozen interest rate hikes in the past year.

And the price increases have often come because of recent interest rate hikes, not in spite of them, experts revealed.

SEE TOP VALUE GROWTH SUBURBS IN EACH CAPITAL BELOW

The unlikely price growth meant the average value of homes in some outer city areas rose by up to $450,000 since the first rate hike in April 2022, according to PropTrack.

Auction clearance rates have been rising in recent weeks.

That’s a level of growth on par with the increases seen during the early Covid pandemic when the market was booming.

The rises in some of the cheapest outer city suburbs also defied a general slowdown in the housing market as a whole.

There were also pronounced price falls in many of the country’s priciest property markets.

PropTrack economist Angus Moore told the Sunday Telegraph the more affordable end of the market was holding up better than the top end.

“Every suburb has a different story, but a broad theme is that people are looking for more space and favouring the areas where they get better (value),” he said.

Property pundits explained that the surprise rises in outer city prices were partly driven by some buyers abandoning plans to purchase homes in more up-market suburbs after their borrowing capacity dropped.

Houses in Adelaide’s outer suburbs had some of the biggest rises in the country.

They instead moved their searches to cheaper areas where their budgets would go further.

The increased buyer competition – at a time of declining property availability – meant the homes were selling quicker and those who wanted them often had to bid up the prices.

Ray White economist Nerida Conisbee said another part of the equation was record migration into Australia.

“We welcomed nearly half a million new people into the country over the last year,” she said. “Most would become renters and that’s keeping pressure on first homebuyers to get into the market.”

Some of the biggest rises in the country were recorded in the north and south of Adelaide – mostly in suburbs more than 25km from the CBD.

They included a belt of suburbs near the Elizabeth area north of the city, where median house prices increased by 35-39 per cent since April last year.

REA chief economist Nerida Conisbee said migration was also pushing up prices.

On the other side of the SA capital, the biggest rises were in a cluster of suburbs south of Glenelg, including Hove and Somerton Park, where prices increased by just over 40 per cent, on average.

There were also spectacular rises in some of Brisbane’s outer suburbs. This included Chuwar in the Ipswich region, more than 40km southwest of the Brisbane CBD, which had the nation’s biggest price rise over the period at 48 per cent.

Fellow Ipswich suburbs Churchill, Eastern Heights, Toogoolawah and Lowood had price rises of 27-32.5 per cent.

To put those figures into perspective, prices across the country as a whole dropped by about 1 per cent over the same period, according to PropTrack’s Home Price Index.

Melbourne’s biggest price rises were in the city’s outer west and Sydney’s biggest movements were in the cheaper northwest and southwest.

One city where outer suburbs did not have the biggest home prices rises was Perth, which has bounced back from a decade slump and is now regarded by many investors to be the nation’s strongest housing market.

Perth saw more growth across the board, with inner areas like Swanbourne seeing a $455,000 (23 per cent) bounce in median house value.

TOP SUBURBS FOR AVG. HOUSE PRICE RISES SINCE FIRST RATE HIKE

(with price growth)

SYDNEY

Glenhaven 20% (+$445,000)

Merrylands West 14.1% (+$132,000)

Warrawee 13.8% (+$474,000)

Wilton 13.2% (+$131,000)

See full list of Sydney suburbs by price growth since April ‘22

MELBOURNE

Pearcedale 12.3% (+$111,200)

Maddingley 10.7% (+$62,500)

Lyndhurst 9.6% (+$82,000)

Lynbrook 8.8% (+$66,000)

See full list of Melbourne suburbs by price growth since April ‘22

BRISBANE

Chuwar 48.2% (+$275,000)

Eastern Heights 32.5% (+$130,000)

Toogoolawah 30% (+$87,000)

Lowood 28.8% (+$95,000)

See full list of Brisbane suburbs by price growth since April ‘22

ADELAIDE

Somerton Park 42% (+$442,000)

Hove 41% (+$335,000)

Northgate 39% (+$230,000)

Elizabeth Downs 38% (+$99,000)

See full list of Adelaide suburbs by price growth since April ‘22

PERTH

Winthrop 27.5% (+$267,000)

North Fremantle 24% (+$300,000)

Parmelia 23.7% (+$73,000)

Swanbourne 23.6% (+$455,000)

See full list of Perth suburbs by price growth since April ‘22