While Sydney, Perth and Darwin property markets are “the most challenged” right now, other cities show more mixed results, according to online property search site realestate.com.au.
Nationally, housing prices are 7 per cent below their late 2017 peak, although almost 30 per cent higher than early 2013, the Reserve Bank stated this month.
Credit ratings agency Moody's expects further improvement in housing affordability predicting declines of 11.4 per cent in Melbourne and 9.3 per cent in Sydney this year.
But while Melbourne may frequently get “lumped in” with Sydney when discussing the falling markets, realestate.com.au chief economist Nerida Conisbee says the “reality is Melbourne is holding up a lot better”.
Melbourne suburb Middle Park again ranked first as Australia's most in demand suburb, according to the search site.
Australia's property markets is a major player in the May 18 federal election, along with a potential interest rate cut as influencing factors on the markets.
“While a rate cut won’t put the market back to where it was, it will certainly flatten out conditions,” Conisbee notes.
“It's also highly likely that banks will pass on any rate cut in full, particularly given the negative sentiment towards them.”
Conisbee describes Sydney as “ground zero” for the nation’s current property market downturn.
“No one wants to buy when homes could get even cheaper.”
When it comes to affordability, Sydney has now moved from being the second least affordable city in the world after Hong Kong, now ranking third behind Vancouver.
While residential stock that was in high demand from investors is now struggling, realestate.com.au has begun to see greater search activity in premium suburbs.
“In every price boom, we see people move to cheaper suburbs in an attempt to get into the market,” Conisbee said.
As prices fall, buyers turn their attention back to premium suburbs, either because they see good value, or prices have fallen enough to allow them to get back in.”
“Right now, Northern Beaches and the inner east of Sydney are seeing the highest number of views per listing in Australia.”
Melbourne suburbs are getting higher views per listing from buyers and renters than Sydney, according to realestate.com.au.
“This is being supported by rising rents and far more mixed price changes across the city,” Conisbee said.
“Overseas-based property seekers are still far more active in Melbourne but have been dropping off in Sydney for almost two years now.”
Cooling property prices have also resulted in increased interest in premium suburbs.
“During the boom, we saw cheaper suburbs taking control of the list — areas like Briar Hill, Montmorency and Montrose where big homes on big blocks at more affordable price points are available,” Conisbee said.
“Now the list features places like Middle Park and Toorak - very expensive suburbs, but cheaper than what they were a couple of years ago.”
Melbourne’s prestigious inner east recorded the largest decline in values over the past twelve months -16.1 per cent, according to Corelogic data.
While Melbourne often is mentioned with Sydney when discussing the housing market slowdown, Conisbee says Melbourne is holding up much better.
“Prices are down but the falls are less than half those experienced by Sydney.”
While prices in Brisbane are flat, Brisbane has “weathered the downturn well”.
Brisbane’s northside continues to be most in demand on realestate.com.au, recording the highest views per listing.
Wilston located five kilometres north of Brisbane’s CBD, has knocked popular inner suburb Paddington into second, which Consibee believes is due to Paddington’s recent house price spike surpassing the $1 million mark.
Conisbee says the site has seen a notable increase in international property search.
“Not just from Asia but also from New Zealand and the UK. Brisbane is a beneficiary of Brexit, seeing the largest increase in property seekers from UK we've ever seen in Australia,” she said.
“The fundamentals of property demand continue to hold up the Brisbane market — jobs are being created and this is supporting population growth.”
Apparently, Adelaide’s property market also has all the right fundamentals.
“Adelaide is unique in that high-end properties are doing particularly well with regards to pricing, but for rentals, we are seeing high levels of demand for cheaper locations.”
Conisbee expects that higher levels of investor activity is coming from the larger capital cities Sydney and Melbourne attracted to Adelaide’s market.
“Population growth is being matched by enough development and investor activity. It may not be exciting, but it really is the utopia for property markets,” Conisbee said.
Perth’s market has long struggled since the mining boom began to subside. The Reserve Bank last week noted that housing loan arrears rates for the state had been increasing, but are still currently less than 2 per cent.
“All (Perth) regions continue to see price drops, however premium suburbs are still doing well,” Conisbee said.
“Not only are prices rising in many suburbs, they are also seeing the highest views per listing on realestate.com.au.
“Perennial favourite, Shenton Park, tops the list for both houses and apartments.”
“Floreat and Swanbourne have both experienced greater than 10 per cent rental growth with many million-dollar suburbs now also in positive territory.”
Hobart remains the highest viewed per listing in Australia on realestate.com.au.
“Finding a bargain in Hobart is no longer possible,” Conisbee said.
An example, while even prison suburbs are known for being unpopular, particularly on the real-estate search site which Conisbee says usually sees very low views per listing, the home of Hobart's maximum-security prison Risdon Vale has recorded 17 per cent price growth across the past 12 months.
“Hobart's economic growth is now likely to be tempered by its housing problem, slowed by lower levels of affordability.”