The last year was marked by continuing rolling pandemic lockdowns and historically low interest rates. When Aussies face financial uncertainty, they tend to put their money into property; whether it’s their own homes or investment properties.

Others may like to spend on restaurants or holidays, but weren’t able to during lockdowns, so put more of their disposable cash back into their mortgages.

These factors, along with a shortage of properties for sale, plus ongoing stimulus from the federal government and the RBA, meant that Australia ended up in a very rare position indeed; one where every capital city and major regional centre around the country was primed for growth.

Usually, one market might be on the rise, while another is correcting and another plateauing, but in 2021, it was boom time in most markets.

What do the numbers tell us?

CoreLogic data showcased a number of impressive highlights for the year.

First, property continues to be Australia’s investment vehicle of choice. The total value of Australian real estate is now estimated at $9.4 trillion; up from $7.2 trillion at the end of 2020.

What this meant was that values at a national level rose by 22.2%, the biggest single-year percentage increase since 1989 Article here 

And in what could be related to so much time being spent at home for work and being locked down, houses outperformed units significantly. House values increased by 24.6%, while unit values spiked by 14.2%.

Tree or sea change?

A major trend of the Covid years has been people moving away from cities, knowing they will be able to continue to work remotely.

By heading to regions of their choice, they have been able to afford bigger houses, while saying goodbye to city traffic and hospitality prices.

Unsurprisingly then, regional properties have actually outperformed the combined capital cities for growth, with a 25.2% rise in values, compared to 21.3%.

CoreLogic’s Best of the Best report showed St Andrews Beach, on Victoria’s Mornington Peninsula, had the nation’s highest growth, with house values up 58.6% for the year. For units, Yamba, on the NSW north coast, was number one with 56.6% growth.

Now, let’s take a look at some of the best performing capital markets.

City dwelling value growth snapshot

Hobart 27.7%

Sydney 25.8%

Brisbane 25.1%

Canberra 24.5%

Adelaide 21.4%

Darwin 16.7%

Melbourne 16.3%

Perth 14.5%

(CoreLogic’s Best of the Best report)

South east Queensland

Brisbane, the Gold Coast and other areas in Queensland’s south east have had a hell of a year, with plenty of upside still in the markets.

Brisbane experienced value growth of 25.1% for the year and it was all about houses in this part of the world. Article Here Nearby, the Sunshine Coast was a big winner.

The suburb of Sunshine Beach saw 157% growth in values over the 12 months, according to REA data. Article Here

Sunrise Beach was second with 117%, while the Gold Coast was represented by Tallebudgera Valley with 94% growth. Minyama (85%) and Noosa Heads (83%) were next best.

Sydney

The harbour city saw nearly 28% growth in house prices for the year and 25.8% in overall dwelling value growth. Article Here 

For houses, Sylvania Waters in the city’s south saw 74% growth, while Copacabana on the central coast (68%), Pearl beach (57%) and Colebee (57%) weren’t far behind, according to REA data.

Avalon Beach (53%) was number one for units.

Ready to rumble

So with all that growth having happened last year, surely some steam is coming out of the market?

In 2022, the challenge will be finding properties with upside for growth, which are still able to be purchased for below market value.

First, the underperformance of units last year may mean they are primed to play some catch up in 2022. Especially in inner city markets, where values have lagged due to Covid and remote working. Once foreign students, visa workers and permanent migrants begin to filter back into the market, we can expect to see a growth spurt, so savvy types who get in now may make a nice return.

At a wider level, there is potential for growth in Perth, which has been some time without a significant surge and was bottom of the table for growth last year; while Adelaide and southeast Queensland are in the midst of a boom and there is equity to be had in those markets.

If you want more info on where might be a good place to invest, or even some help on developing a strategy, reach out to the b Invested team at 1300 367 925, or on [email protected].

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