The number of suburbs where home values hit record highs nearly doubled in June compared to the previous month, albeit from a low base, after house prices rose strongly for the fourth consecutive month, data from CoreLogic shows.
Estimated values in about 15 per cent of suburbs across the country reached a new peak since the pandemic boom, up from just 8 per cent of all suburbs from a month ago.
The number of suburbs hitting new record highs is expected to increase as prices rise. Peter Rae
Tim Lawless, CoreLogic research director, said the proportion of suburbs reaching a new high was likely to increase despite predictions of slower price growth.
“We’ll probably see more suburbs returning to new peaks, but it really depends on what the growth rate trajectory looks like,” Mr Lawless said.
“There are still some downside risks that we’ll see a slowdown in the rate of growth, but even a slowdown still implies growth, so I think we’ll probably see more suburbs getting back to new record highs, especially in those markets that didn’t see sharp declines through the previous downturn.”
Mr Lawless’ analysis is based on suburb-level indices from March 2020 to June 2023.
Perth has the highest proportion of suburbs hitting their peaks at 58.7 per cent followed by Adelaide at 39.3 per cent and Darwin at 11.6 per cent.
In Brisbane, 3.8 per cent of all suburbs hit a record, up from 3 per cent a month ago.
The share of record-breaking suburbs in Canberra doubled to 2.1 per cent, but Hobart has no suburb recording a new high.
Records were hit in 1.6 per cent of all Melbourne suburbs, up from 0.8 per cent in May, while Sydney increased from 0.3 per cent to 0.8 per cent.
“This really tells the picture that we’re through the worst of the downturn and we’re starting to see a rise now in the proportion of suburbs moving back to record highs,” Mr Lawless said.
“But it will take a long time before getting back into the levels that we’ve seen during early 2022.”
At the height of the recent boom, 74.7 per cent of Sydney suburbs hit new highs, 61.2 per cent in Melbourne and more than 99 per cent across Brisbane and Adelaide. Nationwide, more than 80 per cent of all suburbs hit new peaks.
Five Sydney suburbs climbed to new highs in June, including Breakfast Point, Bungarribee, Glenhaven, Punchbowl and Strathfield. They were lifted by solid gains in the past three months, where values rose between 4.7 per cent and 8.6 per cent.
Since the onset of the pandemic, estimated home values in those suburbs had increased between 12.5 per cent and 36.5 per cent.
“Sydney values were down by 14 per cent from peak to trough but in some areas like in the northern beaches on the Central Coast, some suburbs fell by down more than 20 per cent, so it’s not surprising to see a very small portion of suburbs that have moved back to cyclical highs, but it is starting to rise,” Mr Lawless said.
In Melbourne, home values in Docklands, East Melbourne, Melbourne city, Parkville and West Melbourne in the inner-city all climbed to new record highs after prices climbed between 3.3 per cent and 4.7 per cent in the past three months.
Despite the recent price gains, roughly 27 per cent of Australian suburbs remained at least 10 per cent below their peak value at the end of June 2023.
At the suburb level, the largest falls were concentrated in regional NSW, especially the Richmond-Tweed region which has also been impacted by floods in the past year.
The suburbs suffering the largest fall in values since their pandemic peaks include North Lismore with a 37 per cent decline, Bangalow with 35.3 per cent, Lennox Head at 29.3 per cent, Ocean Shores with 27.5 per cent and Byron Bay at 26.1 per cent.
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