Best performers of the last decade

Capital city property values have grown by 9.9% for houses and 8.1% for units during the ‘noughties’ decade. Obviously on a suburb-by-suburb basis the overall performance has varied greatly during the decade.

Looking specifically within capital city markets, the list of greatest growth suburbs has been well and truly dominated by Perth suburbs.11 of the 20 suburbs which have recorded the greatest level of average annual growth during the last decade were situated in Perth. Outside of Perth, Sydney recorded four entries, Darwin and Hobart each had two entries while Melbourne recorded one entry.

The best capital city performer during the last decade has been Oakdowns units in Hobart which has recorded average annual growth in median unit prices of 34.6%.

Brisbane, Adelaide and Canberra recorded no entries within the top 20 however their best performers were: Tarragindi units (Brisbane 23.3%), Windfield houses (Adelaide 27.6%) and Red Hill units (Canberra 25.6%).

Across capital cities the current median dwelling price is recorded at $449,000, only eight of the 20 capital city suburbs detailed have a current median price below the national capital city median. However, 18 of the 20 suburbs detailed have a median price below $600,000.

Capital city markets have generally recorded strongest growth across the housing market with 16 of the 20 capital city suburbs listed being identified as houses rather than units.

Within those areas outside of capital cities the strongest growth in median prices on an average annual basis during the last ten years has been recorded in Silkwood, Queensland. Silkwood which is situated just to the south of Innisfail has witnessed average annual growth in median house prices of 35% during the last decade.

Regional areas of New South Wales have recorded the greatest number of suburbs on the top 20 list with 8. On a state by state basis the following results have been recorded: Victoria (1), Queensland (5), South Australia (1), Western Australia (2), Tasmania (2) and Northern Territory (1).

Inherently, it has been those more affordable suburbs which have witnessed the strongest growth with 13 of the 20 suburbs detailed having a current median price below $300,000. 18 of the 20 suburbs detailed enjoy a median price below $400,000.

Mirroring results across the capital city market, the majority of the best performers during the last 10 years have been for houses rather than units. 16 of the 20 suburbs detailed are houses rather than units.

So what can we learn from the best performers of the last 10 years?

Many of the suburbs detailed are situated on the outskirts of the capital cities and have seen strong growth, largely due to the fact that in most instances pricing has come from a very low base ten years ago. Undoubtedly new development has helped boost prices in many of these areas. However, the cause for concern will likely be the longer term capital growth prospects of these suburbs. Many are a long way from the city centre and have poor public transport amenity limited roads and scarce retail amenity. As capital city populations continue to grow the importance of being situated close to amenity will also grow.

In the regional areas, it is generally the smaller markets and those that have come off a low base that have recorded strongest growth during the last ten years.

Undoubtedly, entering early into an area where new development is set to occur can be a great strategy for making money. However, the important tactic is buying in early and selling at the right time. Whilst many of these outer more affordable areas have seen strong growth over the last ten years, the prospects for capital growth during the next ten years is likely to be much less.

Tim Lawless is the Director of Property Research at RP Data.