Australian median house prices increased by $75,000 over the past 12 months. In many parts of Australia however, the increases were far higher, despite a sharp rise in interest rates during the year. Although the cost of finance soared, there was no shortage of money to buy in some of our most desirable regions.
Topping the list was not surprisingly Sydney’s eastern suburbs. This is not only the most expensive region of Australia but has also seen the strongest increase over the past 20 years. In 2023, Sydney’s eastern suburbs median increased by almost $230,000 to hit $3.6 million.
While Sydney regions dominated the top growth areas over 2023, there were two outliers. Perth saw its median rise by just over $93,000 during the year, however Perth-Inner, which contains prestigious suburbs like Cottesloe and Claremont, saw an increase of almost double that. Inner Brisbane, which includes suburbs such as New Farm and Paddington, saw its median rise by just over $120,000.
Outside of our capital cities, the Gold Coast has been the strongest performer, followed by the Sunshine Coast. These south-east Queensland regions were particularly strong performers during the pandemic and it was predicted by many that it would see a sharp downturn once interest rates started to rise. This didn’t occur and reflects how much these regions have changed post-pandemic. No longer are they boom/bust holiday destinations, with prices moving up and down dramatically every cycle. They now have their own economies which are now less sensitive to what happens elsewhere in Australia.
Will these trends continue? Although Sydney is by far our least affordable city, particularly relative to incomes, there still seems to be significant amounts of people being able to afford to buy in our expensive suburbs. The regional areas that are seeing the most growth are overwhelmingly the same that were doing the best prior to the pandemic – areas that are close to bigger cities that benefit from relative affordability and substantial lifestyle benefits.
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