As speculation of a property market correction continues to dominate media headlines, there are several suburbs where falling real estate values are already becoming reality.
Recent research, analysing median house and unit price changes across the country, has revealed the suburbs where oversupply and economic downturn has led to declining property values over the past twelve months.
Here’s our state-by-state breakdown of the data…
It is regional Victoria that has seen the greatest fall in house prices, with Moyne in the Warrnambool region recording a drop of 21.1 per cent. As the local economy relies heavily on the dairy industry, low farm gate milk prices may be contributing to the current slump.
In The Grampians, homes in Yarriambiack have fallen 18.8 per cent in value, while properties in the Gippsland suburb of Churchill have lost 14.7 per cent, in the wake of the Hazelwood power station closure. The downward trend in unit prices in some Melbourne suburbs could be fuelled in part by the abundance of new apartment blocks cropping up in the inner suburbs, making older units less desirable to buyers.
Faced with the option to purchase a brand-new apartment, few investors are willing to pay top dollar for a 1970s or 80s-built property that likely needs updating to fetch the maximum rent, and will require more ongoing maintenance – as evidenced in Abbotsford, where unit values have fallen 19.3 per cent (unlike house values, which surged almost 40 per cent!), and Ascot Vale, where they have lost 16.1 per cent.
New South Wales
High levels of unemployment in Cowra saw house values drop 25.9 per cent over the past twelve months, while in Wentworth and Buronga on Victorian border lost 24.7 per cent, in the wake of water scarcity and uncertainty in the agricultural sector.
In Sydney’s inner west, units in Lilyfield and Rozelle fell 20.4 per cent, as a proposed new motorway interchange in the area drives buyer anxiety. In Newcastle, Shortland and Jesmond recorded a unit price drop of 11.9 per cent, owing to oversupply and job losses in the mining sector.
In Gladstone, house prices have fallen 28.2 per cent, due in part to an oversupply of newly built homes. In Townsville, values have been on a downward trend for some time, with house prices dropping 26.2 per cent and units 31.7 per cent in the past year as rising unemployment has forced many residents to leave the area.
Meanwhile, Toowong in Brisbane has seen unit values decrease by 16.1 per cent, with oversupply and unpopular new development proposals dragging values down.
In Tasmania, houses in and around Devonport have seen a dip in prices over the past twelve months. A downturn in the mining sector, a key driver of the local economy, could be responsible for the 10.7 per cent drop in prices in East Devonport, and the 9.1 per cent loss recorded in the suburbs of Sheffield and Railton. In Prospect Vale, unit prices are down 4.6 per cent, while growth is flatlining in nearby Launceston – perhaps owing to recent job losses following the closure of several major manufacturing employers.
In the Top End, job losses and a resource sector downturn are putting negative pressure on the housing market. Houses in Katherine have fallen in value by 13.5 per cent, while in Rosebery and Bellamack they have dropped 9.7 per cent. Unit prices in Darwin are also feeling the strain, with Fannie Bay and The Gardens falling 23.1 per cent and Parap 17 per cent over the past year, in what is predominantly an owner-occupiers market.
The decline of the mining boom has seen property values plummet across WA, with homes in the Pilbara among the hardest hit.
In South Hedland, values dropped 39.3 per cent in the past year, while in Port Hedland they fell 34.5 per cent. Units across Perth have also recorded heavy losses, with dwellings in Fremantle down 20 per cent and Subiaco and Shenton Park falling 13.1 per cent as soaring vacancy rates are making investors nervous.
If these suburbs have experienced the biggest value slump, then which suburbs have recorded the biggest growth in property values?