Australia’s best-performing suburbs this year? They’re all in Perth – and there’s standout winner

Perth has dominated a national list of best-performing suburbs, taking out all top 10 spots for the strongest growth in house values, with all suburbs delivering growth of 30 per cent or above over the year.

CoreLogic’s Best of the Best report for 2024 revealed growth conditions varied significantly across the country, with annual value changes ranging from a 2.3 per cent decline in Melbourne to a 21 per cent rise in Perth.

Almost every market in Perth has recorded gains this year.Credit: Moment RF

CoreLogic head of research Eliza Owen said buyers responded to elevated interest rates and affordability challenges by flocking to more affordable segments of the market on Perth’s fringe.

“The top growth house markets were all located in Perth, and half of the suburbs had a median house value below $661,000, which is the 25th percentile house value nationally,” she said.

“The top growth unit markets were located across Perth, Brisbane and Adelaide, and each of the top 10 had a median unit value below $600,000.”

Suburbs in the City of Swan featured heavily in the national list of 10 best performing suburbs, led by Bellevue with a whopping 36.9 per cent growth over the year to hit a median value of $675,000. Stratton, Midvale, Midland and Lockridge were also in the best-performers list.

Owen said that the wealthy, high-deposit buyer pool may thin out the longer the cash rate sits at 4.35 per cent, and low-value markets may lose their appeal as demand pushes previously affordable markets higher.

“Even in high-growth markets of Adelaide, Brisbane and Perth, there are distinct signs of a cyclical slowdown, with the quarterly pace of gains easing over the course of the year,” she said.

Turning to the regions, nationally, Norseman in the Goldfields-Esperance region topped the list of affordable house markets with a median value of $80,289. It was followed by Southern Cross ($99,132) and Morawa ($99,273).

Beachlands in Geraldton recorded the highest 12 month change in values, lifting by 38 per cent to a median value of $391,659. Beverley came in at number four with a growth of 35 per cent to just below $400,000.

Across the capital cities, Perth also dominated the list of suburbs with the highest house rent growth in the year with Middle Swan up 17 per cent. Perth unit markets also made up 8 of the top 10 unit growth markets, led by a 19.5 per cent lift across Melville.

Real Estate Buyers Agents Association of WA representative Matthew Hughes said the surge in value had been driven significantly by east-coast investors in the lower pricing sector, making it challenging for local buyers to compete.

He said that despite a seasonal bump in listings, typical of the spring selling season, Perth’s property market is still contending with tight stock levels with available listings still sitting well below the five-year average.

“Meanwhile, sales volumes have trended up in line with the recent increase in listings, and the median days on market are still very low, at just 11 days,” he said.

“This means buyers are feeling the pressure to move quickly, or they risk bring priced out of the market.

“Impending rate cuts are expected to increase activity in the middle and upper end of the Perth market, as borrowing capacity is unlocked for homeowners sitting on large amounts of equity, as a result of this long-awaited growth-cycle.”

Analyst expectations are for a “shallow” rate-cutting path, with the forecasts across the big four banks placing the cash rate between 3.1 per cent and 3.6 per cent by the end of 2025.

CoreLogic estimates that an affordable dwelling purchase for the median income household in Australia under the current average owner-occupier rate (6.27 per cent) would be around $507,000 – a far cry from the current median of $813,000.

Even in the event of average mortgage rates reducing by 125 basis points (assuming the cash rate reduces to 3.1%, and reductions are passed on to mortgage rates in full), this only takes an affordable purchase price to $581,000.

Owen said there are also tailwinds for households that could boost buyer and renter demand in 2025.

“Wages growth, while slowing, is well above the pre-COVID, decade average, at 3.5 per cent in the year to September,” she said.

“Real household income has been boosted by the Stage 3 tax cuts, despite this boost to income seemingly being saved by households for now. Real household income growth is expected to pick up further as inflation continues to ease in 2025.”