Small capitals shine on global stage for property price growth

A majority of Australia’s capital city residential housing markets are growing at a pace faster than the global average, according to new data from Knight Frank.

A street in Red Hill, Canberra. The Australian capital now ranks within the top 20 for property price growth in the world.

A majority of Australia’s capital city residential housing markets are growing at a pace faster than the global average, according to new data from Knight Frank.

The international real estate firm’s latest Global Residential Cities Index showed six of Australia’s capital cities – Sydney, Canberra, Hobart, Darwin, Adelaide, and Perth – recorded price growth above the international average of 7.4 per cent in the year to March

Canberra was the best performer, with growth of 15.7 per cent, ranking it 17th on a list of 150 locations around the world. It was also one of the 43 cities that achieved double-digit growth over the year through the pandemic, alongside local capitals Hobart (ranked 23rd with 13.8 per cent growth) and Darwin (ranked 41st with 10.8 per cent growth).

Adelaide (up 9.8 per cent) and Perth (up 8.9 per cent) each outranked the larger capital cities at 44th and 51st place respectively. Brisbane was Australia’s worst performing city, middling in 89th place with growth of 5 per cent.

Knight Frank’s head of residential research Michelle Ciesielski said Australia’s smaller cities shone on the global stage because of strong interstate migration trends away from densely populated Sydney and Melbourne.

“The increase in sales transactions demonstrates the commitment in the migration of people moving towards these smaller ­cities and regional areas,” Ms Ciesielski said.

“(Also) many first-home buyers have been in a better position to buy given the relative value compared to where they were ­previously living.”

 

Despite interstate migration figures confirming a strong and enduring exodus from Australia’s largest cities, both Sydney (up 8.6 per cent) and Melbourne (up 6.4 per cent) ranked in the top half of global ­cities in terms of property price growth, in 55th and 70th place respectively.

Global housing prices are now rising at their fastest rate since 2007, with property buyers around the world taking full ­advantage of pandemic-induced border restrictions and record low interest rates.

The Turkish cities of Izmir and Ankara topped the ranking with growth rates of 33.9 per cent and 30.3 per cent respectively.

Across the Tasman, the New Zealand capital of Wellington achieved 3rd place with growth of 30.1 per cent, while Auckland (up 9.6 per cent) ranked 11th. The country’s Reserve Bank last month moved to implement measures to help cool the rapidly rising property market, as is also happening in Canada, China, South Korea and Ireland.