Real Estate Australia: Top 100 suburbs tipped to survive property downturn

These surprise suburbs are best placed to lead the Aussie housing market out of the doldrums. See the full list.

Melbourne is best placed to survive the housing market downturn and lead Australia out of the real estate doldrums in 2023 – a recovery which could begin in the first third of the year – followed by Brisbane and Sydney, according to an extensive new report.

According to realestate.com.au’s Hot 100, moderate price growth during Covid and a return to high immigration levels means Melbourne’s housing market is set for the most robust recovery from the current depression.

Based on a series of metrics including demand and supply of homes for sale, and rental vacancies, the inaugural Hot 100 suburbs to watch has ranked the top suburbs across Australia with the best real estate prospects for home price growth in 2023.

Melbourne has the best growth prospects for 2023. Picture: Julian Andrews.

Melbourne and Victoria lead the list with 29 locations.

“Victorian suburbs are most prevalent on the list, which may seem surprising given the larger price falls to date, but remember that migration is lifting in the state,” said Cameron Kusher, director of economic research at PropTrack, who helped put the report together.

“In Melbourne, price growth has been much more moderate since the onset of the Covid pandemic than in other capitals due to long and repeated lockdowns in 2020 and 2021.

“New South Wales and Queensland suburbs are also prevalent on the list, which speaks to the medium- to long-term fundamentals of these markets, where supply is low and demand is strong.”

NSW and Queensland have 24 suburbs each on the Hot 100, with South Australia recording nine – an indication the state is much closer to the top of its cycle than elsewhere.

According to realestate.com.au’s Hot 100, the top suburbs for price growth in 2023 in Victoria include Altona, Alfredton, Balwyn North, Berwick and Bundoora. Factors influencing the positive outlook for those suburbs include local amenities, public transport accessibility and attraction for investors and immigrants,

NSW suburbs with best growth prospects in 2023, according to the report, include Alexandria Arncliffe, Ashfield and Cessnock. Factors pushing growth in those inner city suburbs include gentrification and location, while Cessnock is popular due to affordability.

In Queensland, Boondall, Bli Bli and Burleigh Heads are among the most promising suburbs for growth, while in South Australia, Blakeview, Brooklyn Park and Christies Beach have plenty of growth potential for next year.

After housing prices exploded by an astonishing 30 per cent across many markets across Australia in 2021, on the back of record low interest rates, home values came crashing back to earth this year. With the noticeable exception of South Australia, which currently has the strongest housing market in Australia.

Over the past 12 months, home prices have grown 12.6 per cent in Adelaide and 15.9 per cent in the rest of South Australia, against national price growth of minus 1.1 per cent and a capital city fall across the board of 3.1 per cent, and minus 3.9 per cent in the regions.

In Sydney, housing prices have fallen by 6.4 per cent, as the city median price dropped below the magic $1m mark to $992,000, through the 12 months to November 30, according to Proptrack.

Price declines for the September quarter were the steepest at both the five-city average and in Sydney since 1983, with values in some suburbs plummeting as much as $330,000 over the past year.

In Melbourne prices have fallen, 4.5 per cent over the last 12 months.

The Brisbane market remains buoyant with price growth of 4.7 per cent over the past year.

The good news is that the worst of the downturn could be behind us, as the pace of price falls slows significantly and rate hikes likely to end sooner rather than later.

Prices fell by just 0.14 per cent over November – the smallest monthly fall since the Reserve Bank’s first cash rate rise in May – and dropped by 0.16 per cent nationally.

Finance guru Mark Bouris said most buyers and sellers are sitting on their hands at the moment given the uncertainty in the market and likely further rate rises.

The avalanche of RBA rate rises should end early next year. Picture: Nikki Short

It was a position Mr Bouris said he could understand.

However he expects the market recovery to begin in the first third of 2023 and that the RBA will eventually pause rate rises, after it delivered the eighth successive rise earlier this month.

“Prices will recover some time next year,” the executive chairman of Yellow Brick Road told News Corp.

“We are not at the start of the cycle, we are much closer to the end.

“It’s more than likely rate rises will stop next year and things will start normalising in the first third of 2023, around April and Easter and people will be back in the market.”

MORE: Realestate.com.au’s hot 100 suburbs heading into 2023

Originally published as Real Estate Australia: Top 100 suburbs tipped to survive property downturn