Places that boomed in 2011

Posted on 9/12/2011  

Many will be happy to see the back of 2011, especially those who make a living out of real estate in our capital cities.

But not everyone will feel that way. Those who owned property in selected suburbs of the big cities, or in key regional areas, will feel 2011 has been pretty good to them.

Western Australia illustrates the point well. The standard media line is that this has been another poor year.

Why? Because the average across the state’s capital city has been negative. RP Data, for example, records a 5 per cent decrease in Perth home values in the past year.

But behind and beyond that one simplistic figure is a different story. My suburb-by-suburb analysis of Perth shows that a third of its suburbs held their values or showed small increases. Outside Perth there was big growth in key regional markets.

Port Hedland maintained its status as the most gravity-defying market in the nation, adding a further 11 per cent to its median house price. It has averaged 22 per cent a year growth over the past decade and now has a median price above $1 million.

Neighbouring South Hedland, which has an even higher long-term capital growth average, added 6 per cent in the past 12 months. It now has a median house price of $725,000, according to Australian Property Monitors.

Karratha, which has been competing with Port Hedland for the title of most remarkable market, has not delivered such spectacular figures of late – but you still pay over $900,000 for the average house in suburbs like Baynton and Nickol.

The Pilbara mining town of Newman also continued its seemingly endless upward spiral, its median price growing 14 per cent to reach $720,000.

The median house price of another iron ore town, Tom Price, grew 23 per cent in the past 12 months to reach $580,000 – but this was based on a small sales sample so the figures may be unreliable.

Kalgoorlie, not my favourite place for property investors given than yields are little more than 5 per cent, nevertheless has had a solid sales market in the past 12 months, its median price growing 6 per cent.

Kununurra in the Kimberly region added 5 per cent to values this year and is likely to continue with a strong market as the expanded Ord River irrigation scheme swings into action.

There are similar stories around Australia. The research houses report a single figure to describe an entire city of millions and this disguises the different situations in individual suburbs – and, of courses, ignores the buoyant areas in the regions.

Sydney, a city of four and a half million, is described by RP Data is one figure – its home values have fallen 1.1 per cent in the past 12 months.

What does that tell us? Well, nothing meaningful, despite the great significance media places upon it.

When you look at the suburb-by-suburb figures from the same source, you see many regional variances.

Blacktown, a much under-rated suburb out west, sold almost 500 houses in the 12 months to October, with a 6 per cent rise in the median house price.

Liverpool, another affordable market favoured by first-home buyers, was up 9 per cent. Nearby Cabramatta recorded a 15 per cent rise in its median house price, as did Cabramatta West.

Down in the far south-west of the Sydney metropolitan area, Camden, Camden Park and Camden South all had small increases in median prices.

On the North Shore, Epping recorded 190 house sales with a 9 per cent rise in the median price, while Chatswood was up 7 per cent for houses and 4 per cent for units.

But the most consistenly buoyant markets were in the regions of New South Wales.

The Hunter Valley stands out as a vibrant economy boosted by infrastructure development and resources activity. Singleton’s median price rose 8 per cent, Branxton was up 7 per cent and Cessnock rose 9 per cent. Many of the suburbs of Newcastle turned in positive performances.

Construction of the $1.5 billion Hunter Expressway is one of the big events keeping this region bubbling.

The regional centres of the north-west, traditionally dependent on agriculture and tourism, are increasingly being boosted by resources activity. In the year to October, Gunnedah’s median price rose 12 per cent while Narrabri was up 8 per cent.’’

Other regional NSW centres which have recorded solid, though unspectacular years, include Tamworth, Port Macquarie, Wagga Wagga, Dubbo, Glenn Innes and Inverell.

Around Australia I find similar stories. Indeed, this is the second consecutive year in which the best regional markets have out-performed the capital cities by a wide margin.

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