With the residential cycle in Australia’s largest capital cities turning, satellite cities are presenting buyers with enticing alternatives.
CBRE Research’s latest Australia Residential Marketview report compares top line metropolitan market performance with trends in some of Australia’s satellite cities.
CBRE’s Head of Residential Research, Australia, Craig Godber said; “In comparison to the larger Sydney and Melbourne markets, where price correction is underway, these locations present not just a significant price differential but also short-term growth rates in excess of their metropolitan counterparts and comparable medium-term growth rates.”
Mr Godber noted that this was evident in Melbourne’s strongly performing satellite centres of Geelong and Ballarat.
“Investors and commuters are gravitating to more affordable areas supported by major infrastructure and amenity. The median house price in Geelong is 32% below the metropolitan Melbourne median, while in Ballarat the differential is 53%,” Mr Godber said.
Across the state border, the median house price in Newcastle is 36% lower than its metropolitan neighbour Sydney.
For Brisbane, while median prices on the Gold and Sunshine Coasts are higher than the metropolitan median, short-term growth rates are stronger while medium-term growth rates are comparable, Mr Godber said.
MAJOR MARKET TRENDS Sydney’s market is now firmly in a correction phase after stellar performance over the past five years. However, the slowdown is still expected to be modest, rather than severe.
Melbourne’s residential prices have continued to rise into 2018, albeit at a slowing rate, showing early signs that the price correction entrenched in Sydney may be heading south.
Brisbane’s medium-term outlook remains favourable. The resurgence of net interstate migration to Queensland is continuing. This should support moderate price growth in the house market and help soak up unit oversupply.
Perth is still expected to see a lag before an improved economic outlook translates into broader recovery in the residential markets.
Adelaide’s market is expected to remain a solid performer over the medium term with the state economy diversifying from its traditional manufacturing base.
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