Talking about property is the unofficial Australian pastime, and most Aussies are acutely aware that property prices around the country are outrageously high. But sometimes it’s hard to cut through the hyperbole and statistics, and really put a finger on how bad the price problem really is.
According to the Australian Bureau of Statistics’ Property Price Index, house prices have risen by 7.5% across Australia’s eight capital cities since March 2020, but that figure alone obscures the bigger picture, a realestate.com.au report suggests.
Their data shows that across the country, more than 250 suburbs have seen house prices increase by $200,000 or more over the past 12 months since May 2020. In 24 suburbs, prices have risen in excess of $50,000 each month (head to realestate.com.au for the full list). New South Wales accounted for 88% of these $50,000-plus monthly growth suburbs, with a majority of these suburbs located in Sydney’s north and east.
But the most dramatic change in median house price anywhere in Australia has been seen in Byron Bay: an eye-watering rise of $1,286,000 to a new high of $2,700,000. That’s an almost 210% increase in just 12 months… With this trend not showing any signs of slowing down.
What’s fuelling this insane growth – we thought we were in the middle of an economically devastating global pandemic! Well, DMARGE spoke exclusively with Edward Brown, Director at leading Australian real estate provider Belle Property, who relates that it’s entirely because of COVID-19 that the market’s stayed so hot:
“People have more money sitting here [in Australia]… They’re not travelling, and the wait time on luxury goods like cars and watches are ridiculous. You can’t even buy kitchenware.”
RELATED: Computer Chip Crisis Could Send Australian Car Prices Crazy
“People offloaded their assets during the start of COVID and now they want to buy. We’re also seeing that people who moved away from places like the North Shore and the Eastern Suburbs to be closer to the city now want to move back to where they grew up. They want a bit of land – who wants to be cooped up right now?”
He also attributes Byron’s popularity to what many are calling the “Hemsworth effect”: big-name celebrities like Chris Hemsworth (funny that) and other high-net-worth individuals moving to the once cosy coastal town has now turned it into a real lifestyle destination. He also points out that while it’s no longer as affordable as it once was, you can still get more land for your money somewhere like Byron or the Northern Beaches than you can in Sydney or elsewhere.
Is this continued growth sustainable? Brown’s not sure.
“At what point does affordability step in? The reality is that with interest rates continuing to stay low and Australia staying internationally isolated, people will continue spending money on property… Things will stay hot.”
The other big question is which suburbs are likely to see the biggest price increases come 2022. Brown’s prediction is simple: anything coastal. “Bondi, Coogee… Anywhere with a bit of water. People love the lifestyle.”
RELATED: ‘Then vs. Now’: What Bondi Looked Like 10 Years Ago Will Blow Your Mind
Better start filling up that piggy bank.
On that note, check out our expert guide on the best Australian and international shares to be buying right now – you’ll need some healthy dividends if you want to jump Australia’s wild property ride…