Areas that surged in popularity during the COVID-19 pandemic aren't seeing the same price rebound as Australia's capitals
According to housing researcher PropTrack, lifestyle areas that experienced a surge in popularity during the COVID-19 pandemic are not witnessing the same price rebound as Australia's capital cities.
While capital city prices continue to rise, regions like Ballarat, Geelong, Bendigo, the Mornington Peninsula, Hobart, and Launceston have seen declines in property prices over the past year, according to a report by The Australian.
In Ballarat, prices have fallen by 5.5%, mirroring the declines in fellow Victorian regional cities such as Geelong (down 4.32%) and Bendigo (down 3.58%), as well as the Mornington Peninsula (down 3.06%). Hobart (down 3.83%) and Launceston (down 2.74%) are facing similar conditions, The Australian reported.
On the other hand, capital cities are experiencing price increases. Adelaide's northern suburbs have witnessed a gain of 12.1% over the past year, while Perth's southeast and southwest regions have seen an increase of around 11%. The West Australian holiday town of Mandurah has also witnessed a rise of 11.86%.
PropTrack senior economist Eleanor Creagh told The Australian that the demand in holiday regions has slowed, leading to an increase in the number of properties available for sale. This, in turn, has contributed to the slower pace of price growth compared to most capital city markets.
The current rebound in capital city prices can be attributed to the limited number of homes on the market, unable to meet the strong demand from buyers due to record net migration and the ongoing rental crisis. Additionally, new home construction is at its lowest level in a decade.
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AMP Investments senior economist Diana Mousina predicted that prices would continue to rise by approximately 5% in 2024. However, she told The Australian that the next 18 months may prove challenging, as around three in five fixed mortgages are set to expire, and an increase in unemployment is looming.
The contrasting trends in the Australian and New Zealand markets differ significantly from global standards, according to The Australian. CoreLogic director of research Tim Lawless said that this discrepancy was due to the majority of borrowers in Australia and New Zealand having short-term fixed rates or variable rates, which immediately impact household budgets. In contrast, borrowers in the UK and US typically have long-term fixed rates.
While three of Australia's capitals—Adelaide, Perth, and Brisbane—have already reached record highs, Sydney is expected to join the pack this month. However, the ACT and Melbourne markets, ranked as the country's second and third-most expensive, have been slower to react to the current market conditions.
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