The suburbs in Sydney, Melbourne and Adelaide where 12 per cent house prices increases are expected

Inner-city suburbs in Australia’s biggest cities are expected to surge by double-digit margins in 2020 as the housing market sets new price records.

Real estate investment group Select Residential Property is predicting house values in areas near the central business district will skyrocket by 12 per cent this year – in Sydney, Melbourne and Adelaide.

In good news for homeowners but a further setback for those trying to get on the property ladder, those predictions would see house prices surpass peaks set in 2017, before the onset of a short-lived downturn. 

 

Real estate data group Select Residential Property is predicting house values in areas near the central business district will skyrocket by 12 per cent this year. Median prices at St Peters (pictured), in Sydney’s inner-west, were expected to surge by $140,649 from $1.172million, despite being a construction site for the WestConnex motorway

Where double-digit price rises are tipped

St Peters, Sydney’s inner-west: up 12 per cent from $1,172,074

West Footscray, Melbourne’s inner-west: up 12 per cent from $798,300

Thebarton, Adelaide’s inner-west: up 12 per cent from $590,308

Braybrook, Melbourne’s inner-west: up 10 per cent from $696,864

Gungahlin, Canberra’s north: up 10 per cent from $748,694 

Sources: Select Residential Property predictions provided to The Australian Financial Review. Forecasts also came from the University of Adelaide, Suburbanite and Propertyology. Figures related to median house prices for each suburb from CoreLogic’s Mapping the Market program 

Median prices at St Peters, in Sydney’s inner-west, were expected to surge by $140,649 from $1.172million, despite being  a construction site for the WestConnex motorway.

A similar story was expected at West Footscray, in Melbourne’s inner-west, with median house prices tipped to rise by $95,796, or 12 per cent, from $798,300.

Adelaide was expected to enjoy good news too, with a 12 per cent increase also forecast for Thebarton in the city’s inner-west, which would see median prices rise by $70,837 from $590,308. 

They weren’t the only suburbs where double-digit increases were expected with a 10 per cent increase tipped for Braybrook, 10km west of central Melbourne.

This would see median prices increase by $69,686 from $696,864.

A 10 per cent increase was also forecast for Gungahlin in Canberra’s north which would see median house prices rise by $74,869 from $748,694. 

In 2019, Sydney and Melbourne were Australia’s best performing housing markets, CoreLogic data showed.

Melbourne’s upmarket inner-east enjoyed a 12.1 per cent increase. 

That was a remarkable turnaround, which saw this area in a year go from being Australia’s worst-performing real estate market to the best.

A similar story was expected at West Footscray, in Melbourne's inner-west, with median house prices tipped to rise by $95,796 from $798,300

A similar story was expected at West Footscray, in Melbourne’s inner-west, with median house prices tipped to rise by $95,796 from $798,300

Australia’s top housing markets in 2019

Melbourne inner-east: up 12.1 per cent

Sydney Inner-West: up 8.8 per cent

Sydney north-west (Baulkham Hills and Hawkesbury): up 8.8 per cent

Melbourne inner: up 8 per cent

Sydney city and inner-south: up 7.7 per cent

Sydney’s north (Ryde): up 6.5 per cent

Sydney’s south (Sutherland): up 6.3 per cent

Sydney eastern suburbs: up 6.3 per cent

Sydney northern beaches: up 6.3 per cent 

Source: CoreLogic median house and unit price rises for 2019 

 

The increase in that part of Melbourne, which includes suburbs like Hawthorn, was more than double the broader city’s 4.6 per cent increase in median house prices last year.

Sydney’s inner-west and the outer north-west, stretching from Baulkham Hills to the Hawkesbury River, were Australia’s second best performing markets in 2019, with median property prices in both areas rising by 8.8 per cent.

They outperformed greater Sydney, which saw median house prices increase by 6.1 per cent to $973,664.

Should Sydney house prices continue to increase in 2020, the mid-point would climb back above $1million for the first time since 2017 – before a crackdown on investor and interest-only loans sparked a record downturn.

Since June last year, house and apartment prices in Sydney and Melbourne have been increasing every month – partially reversing the effects of the record downturn in those cities.

They weren’t the only markets to post annual rises, with median house prices in Hobart and Canberra increasing by four per cent.

Brisbane’s median house price last year rose by a more modest 0.4 per cent.

Adelaide was expected to enjoy good news too, with a 12 per cent increase also forecast for Thebarton in the city's inner-west, which would see median prices rise by $70,837 from $590,308

Adelaide was expected to enjoy good news too, with a 12 per cent increase also forecast for Thebarton in the city’s inner-west, which would see median prices rise by $70,837 from $590,308

How did YOUR city perform in 2019?

Sydney: up 6.1 per cent to $973,664

Melbourne: up 4.6 per cent to $778,649

Brisbane: up 0.4 per cent to $546,781

Adelaide: down 0.3 per cent to $471,419

Perth: down 6.7 per cent to $456,289

Hobart: up 4 per cent to $506,395

Darwin: down 11.1 per cent to $464,625

Canberra: up 4 per cent to $691,551

Source: CoreLogic median house price data for 2019 

Values fell, however, in Adelaide (down 0.3 per cent), Perth (down 6.7 per cent) and Darwin (down 11.1 per cent).

Australia’s median house prices rose by 2.3 per cent in 2019 but the levels were still 3.1 per cent below the peak of October 2017.

Financial markets are expecting the Reserve Bank of Australia to cut interest rates in 2020 by another quarter of a percentage point, which would take the cash rate to a new record-low of 0.5 per cent.

CoreLogic head of research Tim Lawless said rate cuts in June, July and October had underpinned the rebound in Sydney and Melbourne house prices in particular, as the Australian Prudential Regulation Authority also relaxed lending rules.

‘The housing value rebound was spurred on by lower mortgage rates, a relaxation in borrower and serviceablility assessments, improved housing affordability and renewed certainty around property taxation policies post the federal election,’ he said.

Labor was defeated at the May election after it had vowed to scrap negative gearing tax breaks for existing properties and halve the 50 per cent capital gains tax discount from January 2020.

This delivered Prime Minister Scott Morrison’s Coalition government a third, consecutive term. 

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