Home owners in some suburbs of Sydney and Melbourne have seen the price of their properties double in the past five years despite recent falls in the rest of the country.
Prices have jumped in Australia's two most populous state capitals as sustained run-ups in values outweighed the falls of the last 12 months which saw prices tumble after the market peaked in late 2017.
Figures from the latest Domain House Price Report show suburbs on the outskirts of Melbourne and Sydney have been a boon to property developers selling to cash-strapped home hunters chasing cheaper areas out of town.
| SUBURB | MEDIAN PRICE | 5-YEAR CHANGE |
|---|---|---|
| Fraser Rise | $602,500 | 115.2% |
| Hawthorn East | $1,832,500 | 90.8% |
| Ardeer | $621,000 | 81.8% |
| Frankston North | $495,000 | 80.0% |
| Melton South | $410,000 | 74.5% |
| Source: 2019 March quarter Domain House Price Report | ||
Domain senior research analyst Nicola Powell said families had been moving out of the city centre to look for better value, while the lower end of the market was boosted by first-home buyer grants and a bank preference for smaller home loans.
The new suburb of Fraser Rise, 30km northwest of Melbourne's CBD, topped the table by more than doubling over five years with a price increase of 115 per cent to reach a median price of $602,500.
Fraser Rise was previously part of Plumpton, on the outskirts of Melbourne, and only had its name gazetted in 2017, following a proposal for 11 new suburbs in the area.
| SUBURB | MEDIAN PRICE | 5-YEAR CHANGE |
|---|---|---|
| Pitt Town | $1,180,000 | 91.9% |
| Manly | $2,955,500 | 78.0% |
| Fairlight | $2,200,000 | 77.4% |
| Five Dock | $1,738,000 | 76.4% |
| Budgewoi | $520,000 | 76.3% |
| Source: 2019 March quarter Domain House Price Report | ||
Frankston North, 38km southeast of central Melbourne, was the fourth-fastest growing suburb in price terms, rising 80 per cent over five years to $495,000.
Melton South, which came in at number five, is also on the outskirts of town, 35km west of Melbourne's CBD. It grew by 74.5 percent in five years to reach a median price of $410,000.
Not all of Melbourne's five-year price hikes came on the outskirts, though. Hawthorn East, an established inner-eastern suburb of Melbourne, came in at number two on the list, with a 90.8 percent rise over five years bringing its median house price to $1.8 million.
Prices peaked in late 2017 before falling amid regulatory pressure for banks to crack down on lending.
Martin North, founder of Digital Finance Analytics, a property price and economics analysis firm, said the rate of bank lending drives house prices.
'Very generous lending standards from 2010 onwards allowed house prices to rise significantly and that has created a debt problem. The rise in capital values is about a rise in debt as well,' he told Daily Mail Australia on Monday.
Australia's most populous city, Sydney, also experienced price growth over the past five years despite declines in the past 12 months - and just like Melbourne, some of the best performing suburbs were on the very far outskirts of town.
Pitt Town, a suburb on the Hawkesbury River that lies 59km northwest of the CBD and more than two hours' drive away, showed the largest price increase.
Pitt Town jumped by 91.9 percent from a median price of $614,900 five years ago to $1.2 million according to Domain's March quarter property price figures.
Budgewoi, a suburb on the NSW Central Coast about 100km north of Sydney's CBD almost doubled in price from just under $300,000 five years ago to reach $520,000 in the March quarter.
Other suburbs to rise in value were Manly on the northern beaches and neighbouring Fairlight, both in former prime minister Tony Abbott's electorate of Warringah.
The inner-western Sydney suburb of Five Dock, located on the Parramatta River, also nearly doubled to $1.7 million over five years.
Mr North said long term holders of property still had significant gains but those who bought in the last couple of years were not enjoying any of the benefits.
'It depends when, where and the timing,' he said.
The five-year price rises seen in Sydney and Melbourne have not been seen in other state capitals.
'The massive run ups in Sydney and Melbourne mean they are the best five year stories, but Perth has fallen about 18 percent over the past four to five years. There's been no upside in Perth at all,' Mr North said.
'Hobart and Adelaide have risen in the last couple of years. So it varies in different locations.'
