Apartments across dozens of municipalities in Adelaide and regional Queensland, and pockets of Melbourne and Brisbane, are resisting the record-breaking housing downturn, with prices soaring to new highs, data from CoreLogic shows.
Records were set in December for 40 suburbs across Adelaide’s north, south and west, along with 17 regional Queensland localities, which comprised the bulk of the top performing unit markets.
Tim Lawless, CoreLogic’s research director, said the large number of Adelaide suburbs hitting record prices was a reflection of the city’s resilient housing market.
“While Adelaide dwelling values have declined by 1.3 per cent since peaking in July, the subtle fall has been confined to houses rather than units,” Mr Lawless said.
“Unit values remain at a record high at a broad city level, having risen by almost 28 per cent since the onset of COVID.”
Unit values in Adelaide’s Mitchell Park jumped by 30.3 per cent to $410,484, Camden Park by 27.2 per cent to $412,085, Ridgehaven by 26.4 per cent to $382,900, and Brighton by 24.7 per cent to $544,554.
West Beach, St Agnes, Torrensville, Andrews Farm, Windsor Gardens and Glenelg South also hit records after values climbed by more than 21 per cent each over the year.
Four Melbourne suburbs, in the north-western districts where unit supply has been more contained, also hit new highs.
Unit values in Burwood East rose by 7.8 per cent over the year to $693,009, Gisborne was up by 5.2 per cent to $627,198, Keilor East lifted by 3.9 per cent to $785,899 and Avondale Heights by 2.2 per cent to $731,748.
In Brisbane, five suburbs reached record unit prices, including the popular and gentrified inner-city suburb of West End, bayside suburbs Cleveland and Victoria Point, along with the middle and outer ring suburbs of Wishart and Eagleby.
Regional Queensland also featured top performers, including eight Toowoomba suburbs such as Harristown, Kearneys Spring, Glenvale, Wilsonton, Rangeville, Middle Ridge and South Toowoomba and Centenary Heights, highlighting the growing popularity of the area, according to Mr Lawless.
Apartment prices in Broadbeach Waters and Mermaid Beach on the Gold Coast also surged to a new peak, along with Port Douglas and Edge Hill in Cairns, and Pialba and Torquay in Hervey Bay.
A new high point for unit prices was also reached across a handful of regional NSW towns, including North Tamworth, Toormina in Coffs Harbour, Bathurst, Elermore Vale in Newcastle and Grafton.
Pace of capital growth
Despite their stronger performance, these unit markets could weaken in the coming months as the downturn deepened, Mr Lawless said.
“There is a good chance many of these markets will eventually slip into some level of decline, as it’s clear that the pace of capital growth has eased in most of these regions,” Mr Lawless said.
“But the sector’s inherently affordable price points relative to house prices, along with the smaller capital gains during the recent boom, should help shield unit values from the worst of the current downturn.”
During the recent boom, unit values nationwide rose at a much slower rate than houses, climbing by 13.2 per cent, less than half of the 29.9 per cent surge for houses.
Since their peaks, unit values have dropped by a smaller 5.6 per cent, compared to 9.6 per cent for houses.
“The unit sector doesn’t have as high a base to fall from, considering the smaller upswing in values through the recent growth phase,” Mr Lawless said.
“Additionally, with borrowing capacity reducing as interest rates rise, it’s likely the lower price points of unit values have become more broadly appealing.
“Another reason could simply come back to supply. Dwelling approvals for medium to high density styles of housing have mostly held below the decade average since late 2018, while lower density approvals surged through the pandemic in response to the HomeBuilder grant.”
By contrast, unit values in Sydney’s affluent northern beaches and eastern suburbs have fallen sharply in the past 12 months.
Units in Centennial Park, Belrose and Vaucluse were the country’s worst performers, with values plummeting by 23.8 per cent, 23.4 percent and 23.1 per cent, respectively.
Melbourne’s inner eastern suburbs Balwyn North, Hawthorn and Ivanhoe, along with Caulfield South and Ormond in the inner south, also performed poorly. Apartment values slumped by at least 13 per cent each over the year, nearly three times the drop in the city’s median unit values.
Article source: www.afr.com