Why first time buyers should invest in suburban suburbs- and how buying near a school will be the key to making a profit on your property
- CoreLogic predicts inner-city areas of Sydney, Melbourne will struggle in 2021
- Head of research Eliza Owen investors now preferred outer suburban areas
- Outer suburbs, regional areas have seen price growth despite Covid pandemic
- Over longer term, houses near good schools have enjoyed stronger price rises
Homes in the outer suburbs and regional areas are more likely to go up in value than apartments near the city, property experts say.
Since the start of the coronavirus pandemic in March, houses in the suburbs have fared well despite a recession while unit prices near the city have fallen as the national border closure kept international students out of Australia.
This contrast was stark in Melbourne where properties in the inner-east plunged in value by nine per cent, compared with a slip of just 0.1 per cent in the Mornington Peninsula, CoreLogic data showed.
Melbourne’s broader market dropped by five per cent between March and November.
Homes in the outer suburbs and regional areas are more likely to go up in value than apartments near the city, property experts say. House prices in the Moreton Bay area north of Brisbane (Bribie Island, pictured) have increased during the pandemic as inner-city values fell
Brisbane saw a similar, although less dramatic story, with inner-city homes dropping in value by 2.3 per cent in just eight months as property prices in the Moreton Bay area north of the Queensland capital rose by 2.4 per cent.
Sydney’s median house price fell by 3.2 per cent, between May and August before recovering, as regional prices surged to hit new records.
Eliza Owen, CoreLogic’s head of research in Australia, said inner-city areas in Sydney and Melbourne were likely to lose value next year.
‘Looking forward to 2021, New South Wales dwelling markets are generally expected to remain in upswing, but pockets of the market are at risk of further decline,’ she said.
‘Demand is generally shifting from inner-city stock preferred by investors, to detached housing at the periphery of the metropolitan area, and in regional NSW.
‘Pockets of risk remain for inner city Sydney and Melbourne dwelling markets.’
Over a longer period, houses near good schools are more likely to go up in value.
In Melbourne properties in the inner-east (Prahan, pictured) plunged in value by nine per cent, as median prices in the Victorian capital fell five per cent during the pandemic
Brett Warren, the director of Metropole Properties in Brisbane, cited Matusik Property Insights data showing a 34.3 per cent surge in average prices in areas near the ten best schools, compared with a city-wide increase of 20.4 per cent between 2013 and 2018.
‘I would suggest that these top schools are based in older, established neighbourhoods where there is a shortage of land and therefore no ability to build new housing,’ he said.
‘As there is usually a catchment and boundaries, these also create a level of scarcity.’
Outside inner-city housing markets, CoreLogic expected record-low interest rates to underpin demand for suburban and regional houses.
‘Demand for housing is expected to remain strong in the near term,’ Ms Owen said.
Fears of double-digit house price drops across Australia, at the beginning of the pandemic, did not materialise with national housing values falling by 1.9 per cent between March and September before recovering and increasing by 0.4 per cent in October and 0.8 per cent in November.
In November, property prices rose to a record high in 32 regions with beach-side locations from the Gold Coast to the NSW Mid-North Coast making the list.
Parts of Brisbane, Adelaide, Hobart and Canberra made the list, along with Newcastle, Shepparton in western Victoria and Launceston in northern Tasmania but Sydney and Melbourne were nowhere to be found.