Growth in home prices varied considerably across Australia last year with the house market cooling after a prolonged surge in prices — particularly in Sydney and Melbourne.
House prices in Sydney recorded their sharpest downturn in more than two decades, falling by 10 per cent in the past 12 months while Melbourne experienced a 9 per cent drop.
It hasn't all been doom and gloom for homeowners amid the downturn with the top quartile of the market proving more resilient.
At the bottom end of the market, it has become evident that property prices across the country will not be able to keep up with inflation over the foreseeable future.
New findings from Proptech platform Sell or Hold has identified that one in seven property markets in Australia will potentially have negative capital growth over the next three years.
The software provider, which enables property owners to determine whether they should sell or hold their dwellings, has found that 860 markets in the nation are on track to post price falls over the next three years.
Related: These Are Sydney's Most Affordable Suburbs
The bottom five property markets by state and territory
| State | Suburb | Dwelling type | Median | 3-year growth |
|---|---|---|---|---|
| NSW | Vineyard | H | $2,394,306 | -3.7 |
| NSW | Leppington | H | $891,165 | -1 |
| NSW | Villawood | U | $637,236 | -0.4 |
| NSW | Wyalong | H | $298,633 | 0.1 |
| NSW | Macquarie Park | U | $782,888 | 0.2 |
Of the locations assessed, about 40 per cent of Western Australia’s property markets were classified as bad in the research, with the Northern Territory not far behind on 39 per cent.
Third and fourth place respectively were Queensland with 17.6 per cent and New South Wales with 13.2 per cent of its markets set to record negative growth over the next three years.
| State | Suburb | Dwelling type | Median | 3-year growth |
|---|---|---|---|---|
| VIC | McCrae | U | $752,506 | 0.6 |
| VIC | Clyde North | H | $562,307 | 1.5 |
| VIC | Templestowe | U | $783,770 | 2.2 |
| VIC | Alphington | U | $640,740 | 2.3 |
| VIC | Croydon South | U | $758,123 | 2.3 |
The dwelling type and suburb tipped to fall the most in price were houses in Blackwater in western Queensland with prices predicted to drop by 5.2 per cent.
Houses in Vineyard in the Blacktown region of Sydney were the second worst market, according to the research, with prices forecast to reduce by 3.7 per cent over a three-year period.
Houses in Leppington and units in Villawood, both in Sydney, are also predicted to fall in price over the next three years.
| State | Suburb | Dwelling type | Median | 3-year growth |
|---|---|---|---|---|
| QLD | Blackwater | H | $121,884 | -5.2 |
| QLD | Drayton | U | $1,411,000 | -3.2 |
| QLD | Cloncurry | H | $150,659 | -2.8 |
| QLD | Monto | H | $118,511 | -1.9 |
| QLD | Bowen | H | $268,725 | -1.9 |
“We chose the baseline comparison against inflation to show that dwellings in these markets aren’t worth holding for growth reasons because they will be worth less than they are today in real dollar terms,” Sell or Hold head of research Jeremy Sheppard said.
“Some people might be better off to sell so they can take advantage of opportunities in other markets.”
Houses in Smithton and Queenstown were among the weakest property markets in Tasmania while South Australia's weakest markets were houses in Quorn and units in Ferryden Park.
Units in ACT and Northern Territory rounded out those state's weakest market dwellings. Red Hill in ACT and Johnston in the Northern Territory were projected to experience minimal growth over the next three years.
“While the data projected price falls in specific dwellings in these locations, conversely there are literally hundreds of other markets where prices are set to soar over the same time period,” Sheppard said.
“It’s not popular to predict bad property markets, but at the end of the day, property owners and investors must be aware that there are some markets that will languish for years so it may be futile holding on for better days.”
