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Australia’s record-breaking year in real estate

Following an extraordinary 2020, this year has seen Australia’s residential housing market experience unprecedented growth, thanks to continued momentum.

Last year’s momentum, combined with monetary and fiscal stimulus measures, has propelled the market, pushing its value to record highs, according to CoreLogic’s annual Best of the Best Report.

CoreLogic’s Head of Research Eliza Owen said the estimated value of Australia’s residential real estate had gone from $7.2 trillion at the end of November 2020, to reach a record high of $9.4 trillion in just 12 months.

In addition, sales volumes climbed to an estimated 614,635 in the past 12 months, the highest level in almost 18 years, as dwelling values nationally increased 22.2 per cent in the 12 months to November, the highest increase since 1989.

“Strong housing market performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” Ms Owen said.

“Rates of housing turnover had also been relatively low for some years before these factors boosted housing demand, which may also explain the elevated volume of sales in the past 12 months, which at November was 32.6 per cent above the decade annual average.”

Detached house values increased 24.6 per cent in the past year, outperforming the 14.2 per cent uplift in national unit values, the report showed.

Similarly, the 25.2 per cent increase in regional dwelling values surpassed the performance of the combined capital cities (21.3 per cent), which Ms Owen said was due to a variety of factors including extended lockdowns through 2021 and remote work trends.

“The popularity of regional Australia is reflected in many aspects of the Best of the Best report for 2021,” Ms Owen said.

“The quiet coastal suburb of Yamba, in the Coffs Harbour-Grafton region of NSW, achieved the highest annual growth in units of suburbs across Australia, at 56.6 per cent.

“Regional suburbs were represented in many of the top value growth tables, including Ocean Grove units in Geelong, up 41.7 per cent in the year, Fraser Island units in Wide Bay, up 48.2 per cent, and Campbell Town houses in Tasmania, up 50.5 per cent.”

High-end lifestyle markets such as the Mornington Peninsula near Melbourne and the Northern Beaches in Sydney were also among the year’s top performers, with St Andrews Beach recording a record growth rate of 58.6 per cent, the highest for houses in the country.

Mosman, on Sydney’s Lower North Shore, recorded 325 transactions worth almost $1.8 billion in house transactions, while units dominated the list of most expensive property sales with three selling for more than $40 million each in the new Barangaroo tower.

The top 10 sales totalled $407 million and ranged from $31.25 million to $60 million.

Source: CoreLogic

Despite its strength, the year has also experienced a softening in growth trends as many of the driving forces behind the current upswing lost some impact in the second half of 2021, according to the report.

A surge in vendor activity resulted in a significant pick up in new listings, adding almost 51,000 new property listings in the four weeks to 5 December, 2021.

New listing figures for the same period in the previous five years averaged 41,800. The number of auctions scheduled across the combined capital cities also reached a new high in the week ending 28 November (4251) only to have the record broken again two weeks later when almost 5,000 properties went under the hammer.

It was likely Australia’s property market had seen the peak of value increases as worsening affordability constraints, a surge in vendor activity and a recent tightening of housing finance conditions took effect, Ms Owen said.

While providing an outlook for the 2022 market, Ms Owen noted the likelihood that sales and listings activity had also likely peaked.

“The constraints of slightly tighter credit conditions, the erosion of housing affordability and a higher level of listings being added to the market are expected to see softer growth rates across property values in 2022,” Ms Owen said.

“These forces are an accumulation of headwinds for property market performance. Softer growth rates are likely to coincide with fewer purchases, where sales and listings activity eventually move with momentum in price.”

New South Wales

Highest median value (houses): Bellevue Hill, Sydney – Eastern Suburbs $8,736,643

Highest median value (units): Point Piper, Sydney – Eastern Suburbs $3,216,796

Lowest median value (houses): Hay, Murray $148,499

Lowest median value (units): Kooringal, Riverina $236,118

Highest 12 month change in value (houses): Gerringong, 56.4 per cent

Highest 12 month change in value (units): Yamba, 56.6 per cent

Highest 12 month change in rents (houses): Finley, 37.8 per cent

Highest 12 month change in rents (units): Narooma, 33.7 per cent

Highest rental yields (houses): Finley, 9.7 per cent

Highest rental yields (units): Muswellbrook, 7.2 per cent

Source: CoreLogic

Victoria

Highest median value (houses): Toorak, $4,881,451

Highest median value (units): Ashburton, $1,326,053

Lowest median value (houses): Murtoa, $156,642

Lowest median value (units): Numurkah, $204,015

Highest 12 month change in value (houses): St Andrews Beach, 58.6 per cent

Highest 12 month change in value (units): Ocean Grove, 41.7 per cent

Highest 12 month change in rents (houses): Tootgarook, 20.2 per cent

Highest 12 month change in rents (units): Cowes, 21.8 per cent

Highest rental yields (houses): Warracknabeal, 8.7 per cent

Highest rental yields (units): Numurkah, 6.2 per cent

Source: CoreLogic

Queensland

Highest median value houses: Sunshine Beach, $2,414,687

Highest median value units: Noosa Heads, $1,455,208

Lowest median value houses: Monto, $128,281

Lowest median value units: Woree, $158,846

Highest 12 month change in value (houses): Mermaid Beach, 51.7 per cent

Highest 12 month change in value (units): Fraser Island, 48.2 per cent

Highest 12 month change in rents (houses): Clear Island Waters, 28.3 per cent

Highest 12 month change in rents (units): Noosa Heads, 30.8 per cent

Highest rental yields (houses): Collinsville, 12.5 per cent

Highest rental yields (units): Woree, 10.7 per cent

Source: CoreLogic

South Australia

Highest median value (houses): Unley Park, $1,958,302

Highest median value (units): Kent Town, $561,649

Lowest median value (houses): Nangwarry, $129,477

Lowest median value (units): Murray Bridge, $201,656

Highest 12 month change in value (houses): Beaumont, 49.2 per cent

Highest 12 month change in value (units): West Lakes, 20.3 per cent

Highest 12 month change in rents (houses): Port Elliot, 27.3 per cent

Highest 12 month change in rents (units): Ascot Park, 15.2 per cent

Highest rental yields (houses): Port Pirie West, 9.2 per cent

Highest rental yields (units): Salisbury, 6.9 per cent

Source: CoreLogic

Western Australia

Highest median value (houses): Dalkeith, $2,822,362

Highest median value (units): North Fremantle, $771,064

Lowest median value (houses): Kambalda East, $90,155

Lowest median value (units): Orelia, $176,480

Highest 12 month change in value (houses): South Carnarvon, 55.5 per cent

Highest 12 month change in value (units): Orelia, 35.7 per cent

Highest 12 month change in rents (houses): Djugun, 34.9 per cent

Highest 12 month change in rents (units): Armadale, 18.2 per cent

Highest rental yields (houses): Kambalda West, 14.7 per cent

Highest rental yields (units): Orelia, 8.1 per cent

Source: CoreLogic

Canberra

Highest median value (houses): Campbell, $1,953,012

Highest median value (units): Yarralumla, $1,089,143

Lowest median value (houses): Strathnairn, $576,477

Lowest median value (units): Lyons, $376,778

Highest 12 month change in value (houses): Watson, 39.7 per cent

Highest 12 month change in value (units): Palmerston, 29.3 per cent

Highest 12 month change in rents (houses): Throsby, 19.1 per cent

Highest rental yields (houses): Palmerston, 13.5 per cent

Highest rental yields (units): Gungahlin, 5.8 per cent

Source: CoreLogic

Northern Territory

Highest median value (houses): Fannie Bay, $848,718

Highest median value (units): Bayview, $504,953

Lowest median value (houses): Katherine, $338,269

Lowest median value (units): Gillen, $280,860

Highest 12 month change in value (houses): Moulden, 32.6 per cent

Highest 12 month change in value (units): Rapid Creek, 29.7 per cent

Highest 12 month change in rents (houses): Anula, 30.6 per cent

Highest 12 month change in rents (units): Woolner, 20.4 per cent

Highest rental yields (houses): Katherine, 8.9 per cent

Highest rental yields (units): Parap, 8.5 per cent

Source: CoreLogic

Tasmania

Highest median value houses: Sandy Bay, $1,444,480

Highest median value units: Hobart, $865,243

Lowest median value houses: Rosebery, $147,186

Lowest median value units: Devonport, $321,687

Highest 12 month change in value (houses): Campbell Town, 50.5 per cent

Highest 12 month change in value (units): Brighton, 35.8 per cent

Highest 12 month change in rents (houses): Bicheno, 40.9 per cent

Highest 12 month change in rents (units): Newnham, 16.9 per cent

Highest rental yields (houses): Queenstown, 8.7 per cent

Highest rental yields (units): Brighton, 5.3 per cent

Source: CoreLogic

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Nicole Madigan

Nicole Madigan is Senior Journalist and Content Producer for Elite Agent.

Kylie Dulhunty

Kylie Dulhunty is the Deputy Editor at Elite Agent.