Affordability pressures are pushing buyers further out with suburbs located more than 40km from a CBD making up half of the nation’s top ten growth areas, new data reveals.
Australia’s best growth ‘burbs for houses range in median price from $486,250 in Meadows in South Australia to $2,425,000 in Bringelly in New South Wales near the site for Sydney’s second airport at Badgerys Creek.
Only two of the top ten areas are located under 20km from the nearest city, with five located more than 40km from the CBD highlighting the number of buyers that have been priced out of inner city areas.
Year on year growth rates for these areas vary from 36.7% to 57.8% and reflect the strong capital growth seen in both Melbourne and Sydney.
The analysis of Australia’s greater metropolitan growth suburbs looked at CoreLogic figures for areas with at least 10 house sales over the 12 months to 31 June 2016 compared to the 12 months to 31 June 2017. The data was limited to areas found within 50km of the CBD.
Outer suburbs are the new hotspots
Coombs in the ACT is a new suburb and it’s likely that the level of development in that area accounts for the spike in price growth, says REA Group Chief Economist Nerida Conisbee.
For other suburbs in the top ten, it’s clear that buyers now have to look a lot further afield.
“People are prepared to commute quite some distance, particularly in NSW. If they can get the home that they want, they are quite prepared to be very far from the city and that’s showing in these numbers,” she says. Badgerys Creek airport is also affecting growth in some of the NSW areas that made the top ten, Conisbee says.
“The second airport in Sydney was announced quite recently and we have seen quite a big jump in prices in suburbs located quite close to the airport … I suppose what’s interesting about those suburbs located around the airport is that they have traditionally been first-home buyer suburbs but the airport is now really pushing up price growth.”
While certain markets, particularly Melbourne and Sydney, have seen strong growth rates in the recent past that’s not likely to go on forever, according to Consibee.
When you are buying you do consider that past growth isn’t necessarily indicative of future growth. If an area has seen very, very strong price growth you shouldn’t be buying assuming that the price growth will continue. Buyers need to still purchase within their means and stay savvy.