The property market was on its deathbed at the start of the year, but it’s bounced back to full health in just six months.
After the largest and longest correction on record, national property prices have increased more than 4.7 per cent since June.
That means the property market is growing at an annualised pace of roughly 10 per cent – nearly five times faster than wages.
The rapid rebound has prompted many economists to sound the alarm over spiralling household debt.
But the national growth rate is small beer compared to some suburbs.
According to property analytics firm CoreLogic, the fastest-growing suburbs in 2019 experienced house prices rising between 13.1 per cent and 22.3 per cent over the year.
The Melbourne beachside suburb of St Kilda topped the list, with annual growth of 19.6 per cent.
Moranbah, a mining town in northern Queensland, came second, with 19.0 per cent.
And Melba, a suburb roughly 20 kilometres north of Canberra’s CBD, ranked third, with 17.1 per cent.
CoreLogic’s head of research Tim Lawless said the top 10 could be split into two categories: Mining towns, and “prestige” metropolitan areas in Melbourne and Sydney.
Suburbs at the top end of town performed particularly well, because they experienced the largest falls during the downturn.
These suburbs consequently saw the biggest improvements in affordability, meaning buyers were keen to snap up homes in these areas as soon as the market stabilised in July.
Meanwhile, property prices in mining towns increased off the back of renewed strength in Australia’s resource sector.
The gains will likely be short-lived, as values in mining towns typically move in line with commodity prices.
And the sharp gains came off very low bases, too, as the end of the resources boom in 2014 saw values plummet by more than 50 per cent in some mining communities.
“The area that’s a little bit different is Melba, in Canberra, at No.3. That’s more of a middle-to-outer-ring suburb,” Mr Lawless told The New Daily.
“It’s a relatively established suburb and has good transport linkages back into the city. So I think, with Melba, the story is around strong affordable housing options, mostly detached homes, driving that growth.”
The story was fairly similar in the unit market.
The mining suburb of South Hedland, in the Pilbara (WA), came first with annual price growth of 22.3 per cent.
And popular lifestyle suburbs such as Sandringham, on Melbourne’s coastline, and Collingwood, in Melbourne’s CBD, performed strongly, too.
“The other trend would be – even though we’ve seen real weakness across many of the rural markets due to the drought, a lot of the major service centres have [acted as] a sponge,” Mr Lawless said.
“We are seeing those centres showing stronger demand, as many of the agricultural communities contract and move back to the major service centres.”
Bendigo and Mildura, in Victoria, are good examples of this trend.
The median unit price in Bendigo increased 16.5 per cent over the year to $264,906, while Mildura’s median increased 15.8 per cent to $178,364.
“You find the major service centres are where all the major government services are, where the retail is, where any of the engineering services that support the mining sector will be based,” Mr Lawless said.
“They’re still heavily dependent on agriculture, but they tend to have a more diversified economy … and part of [the price rises] is also reflective of affordability pressures in Melbourne, with the population expanding outwards.”