Housing Report Card: many sellers remain in a good position despite price declines

The recent PropTrack Home Price Index¹ showed that those who purchased property before the pandemic would still make a healthy return on investment if they were to sell today. The report revealed that while home prices nationally have fallen 4.51% from their peak in March 2022, prices remain 28.5% higher than pre-pandemic levels.  

"For those that purchased their home pre-Covid, in most parts of the country home prices are still up a significant amount compared to three years ago, even with the recent downturn," explained senior PropTrack economist Eleanor Creagh.  

Use the interactive below to see how your suburb has performed. 

Ms Creagh highlighted Hobart, Brisbane and Adelaide as the capitals that have experienced substantial price growth since the pandemic, with prices in these cities still up more than 40% on pre-pandemic levels, according to the most recent Home Price Index. Some regional areas have experienced even stronger growth, with home prices up more than 50% on pre-pandemic levels in some regional territories. 

"This means that even as house prices fall, there is a substantial buffer, given that after that significant rise, many existing homeowners are sitting on a substantial level of home equity," she said. 

While conditions are favourable for those who bought before the pandemic, the situation differs for those who purchased at the peak of the market. 

"For those who bought at or near the peak in 2022, their home is likely to have declined in value relative to when they bought, but this is a very small percentage of homeowners," said Ms Creagh. 

"There was a cooling of double-digit price growth and a moderation in market activity, and home price growth slowed from the fast pace recorded throughout much of 2021.  

"Property price growth then slowed down quickly in 2022, before national home prices peaked in March 2022. As 2022 progressed, interest rate expectations and then the fast pace of rate rises that eventuated, were the primary driver of slowing and then falling home prices," she said. 

While national home prices have fallen for the 10th month in a row, many experts believe the worst of the downturn has passed.² 

Ms Creagh added that prices will likely continue to decline through 2023³, but at a slower pace with interest rates on the rise, mortgage servicing costs climbing and maximum borrowing capacities further reduced. 

Regional suburbs lead price growth 

Throughout Covid, many buyers moved to regional and coastal suburbs, which led to both a short supply of property and increasing prices, according to the latest average estimated value Automated Valuation Model (AVM) data. 

"While increasing borrowing costs are a headwind for prices, regional markets continue to exhibit a lesser pace of price falls," said Ms Creagh. 

"Regional markets remain buoyed by shifting lifestyle priorities, migration trends and affordability advantages that are still in play.” 

Over a three-year period, AVM data shows that prices have grown significantly in some regions. The top price growth suburb nationally for houses was Jindabyne⁴ in the NSW Snowy Mountains, which saw a 116% increase in value, rising to a median of $1.4m.  

Michael Henley⁵ of Henley Property said he's noticed a huge increase in interest in Jindabyne over the past few years. 

"Over the last few years the property market has doubled to tripled in a lot of cases. There was huge demand through the Covid years especially," he said. 

"Jindabyne has a lot to offer from snow in the winter, to biking, water skiing and wakeboarding on Lake Jindabyne. There are also two great schools in the area including Snowy Mountains Grammar and Jindabyne Central School, both from kindergarten to year 12." 

Mr Henley said the most impressive sale he made was in 2021, when 60 Jerrara Drive⁶ East Jindabyne sold for $2.4m. Just three weeks later, another property at 17 High Country Drive⁷ changed hands for more than $3.0m.  

"The market had just changed massively. In a few weeks we had not only broken $2.0m, which was the previous record, but then $3.0m," he added. 

Coastal and rural towns in Queensland have also experienced significant price increases over the past three years, particularly in unit markets.  

Units in the popular holiday destination of Noosa Heads⁸ had the biggest price growth of 97%, hitting a median of $1.87m.  

Over the last 12-months, price growth has been less extensive. Gin Gin⁹ in Queensland’s Wide Bay region took out the number one spot for house price growth, with values increasing 30% to a median of $308,000. 
 
Houses in South Australia dominated the national Top 10 list for annual growth. Waikerie¹⁰ experienced 29% growth, rising to a median of $298,000, while house values in Crystal Brook¹¹ in the Barossa region grew by 28%, reaching a median of $287,000. 

As for units, Moama¹² in the Murray region of NSW had the highest price growth nationally, with values increasing 30%, to a median of $483,000. 

Adelaide proves popular 

 Suburbs in and around Adelaide were the most popular around the country over the past 12 months, with six out of the ten most in-demand suburbs for houses located there. 

Upper Sturt¹³ near the Mount Lofty Ranges in Adelaide was the most in-demand suburb nationally for houses, with 489 potential buyers per listing.  

Meanwhile, Bulli¹⁴ near Wollongong¹⁵ in NSW was the most popular suburb for units, with 221 potential buyers per listing. 

Director of Ray White Adelaide City, Andrew Downing¹⁶ said that since Covid, he has seen many interstate settlers and international expats move to Adelaide, along with strong investor interest. 

"More recently, interstate investors who want to start a portfolio over here have been really strong in the CBD, especially in the lower price brackets of $400,000–$600,000," he said. 

 He added that it feels like the rest of the world has realised Adelaide is a great place to live. 

"It's an easy place to live – there's no traffic, it's still affordable, the CBD is busy, it has top food and wine options and it's also close to the beach," he said. 

As for the fastest-selling suburbs, similar to last year, those in Tasmania and Queensland were the fastest-selling nationally over the past 12 months. Houses in Lenah Valley¹⁷ had the shortest days on market, lasting only nine days on realestate.com.au before being snapped up. 

Houses in Manly West¹⁸ in Brisbane also didn't last long on site, remaining on the market for just 10 days. 

Freshwater¹⁹ near Cairns was a popular suburb among buyers in 2022, with units only lasting 10 days on site, along with units in the Hobart suburb of Snug²⁰ and in Macquarie Links²¹ in South Western Sydney.  

Ms Creagh said competition for buyers in many markets will continue to remain tough as stock dwindles. 

"Conditions remain tough for regional buyers, with the number of properties listed for sale still well below pre-pandemic levels, which is also seeing some markets remain more competitive and shielding home values," said Ms Creagh. 

Investors eye off Melbourne 

Many tenants across the country are facing rental price increases, which come as high demand and low levels of rental stock combine with investors’ need to compensate for rising interest rates and increased cost of living pressures. 

Houses in Katanning²² near Perth attracted the largest increase in rental values nationally, rising 47% over the year to a median of $375 per week. 

Meanwhile, the Melbourne²³ rental market saw a post-Covid recovery, with unit prices rising by 42% to hit a median of $540 per week. 

Head of customer advocacy at :Different VIC, Danielle Bunton, said that increased rents had come off the back of tenants returning to the city post-Covid, and that there was no sign of the rises easing. 

"I think that unfortunately we'll continue to see rising rents – owners are trying to offset the rising cost of living and the rising interest rates against rent." 

Ms Bunton has had many conversations with landlords and tenants on the topic of rising rents over the past year and said it's never easy. 

"You often have to have a conversation with the owner to remind them that rents can't just increase in line with interest rate rises and have to reflect market value.

"And then you have to have a conversation with the tenant, which can also be really challenging, particularly when they start to tell you what their situation is and how an increase is going to impact them. 

"Cost of living increases impact tenants as much as owners – it's a market where everybody is stressed, paying the extra mortgage is really challenging and paying extra rent is also really challenging," she said. 

Originally published as Housing Report Card: many sellers remain in a good position amid price declines