Despite high interest rates and ongoing cost-of-living pressures, several Australian housing markets remain resilient—especially in the nation’s east and west, according to Herron Todd White’s Month in Review for April.
“Whilst a few residential markets across the country have experienced some minor value decline over the past six months, this has been on the back of substantial overall price growth since the early stages of the COVID-19 pandemic,” said Shaun Thomas (pictured), director at Herron Todd White.
“Other markets including that of Perth, Adelaide and Brisbane have seen strong growth over the past 12 to 18 months.”
Premium suburbs—those with high capital value and strong demand—typically share common features such as:
“All metro areas and many regional areas across the country will have premium locations, be they regions, suburbs or sometimes just premium streets,” Thomas said.
Given rising prices, with home values reaching new peaks in April despite post-election uncertainty and global trade tensions, many buyers are finding it difficult to afford detached homes in top-tier suburbs. But Thomas offered strategies to still break into these areas.
“The most obvious way is to consider purchasing a unit instead of a house, at least as a stepping stone into the market,” he said.
According to February data from CoreLogic, the median value gap between houses and units is significant in all major capital cities:
In premium suburbs, the gap widens dramatically:
For those set on buying a house in a premium location, Thomas recommends compromising on certain features.
“Considering properties on a main road, those with smaller land sizes including terraces and semi-detached homes or dated or unrenovated homes – the fabled worst house on the best street – are all likely to lead to hundreds of thousands, if not millions, of dollars in price difference,” he said.
Another strategy is to target suburbs adjacent to premium markets. These offer similar benefits at a more accessible price and often perform well during market upswings.
“These suburbs will often ride the coattails of their premium neighbours when the market rises,” Thomas said. “This is likely to mean stronger capital growth over time as middle to upper markets are often the first to move and will often see bigger upswings during periods of growth.”
However, Thomas warned that these same areas can be more vulnerable during downturns.
“The flipside is that when the market starts to cool, they will also be the first to move in the other direction and suffer larger corrections during market downturns,” Thomas said.
