Which middle and outer ring suburbs will benefit from the market's ripple effect?
As the ripple effect clicks into action, markets in our major cities are shifting.
A standard pattern in property cycles is that an upward movement starts in the Top End suburbs and gradually ripples out to the middle and outer ring suburbs.
We’re seeing this playing out in Sydney and Melbourne as 2014 winds on.
The pattern of activity in Sydney shows that sales levels in many of the millionaire suburbs have tapered off. In the Price Predictor Index, which tracks sales volumes in cities and towns across Australia, many of the Top End suburbs in Sydney have been downgraded.
But several markets in the middle and outer ring areas have been upgraded, because sales activity has picked up.
The Sydney precincts that still have strong growth momentum are mostly in the far west and south-west. The municipalities centred on Parramatta, Blacktown, Penrith, Liverpool, Campbelltown and Camden have numerous suburbs with rising activity levels.
The pattern is similar in Melbourne – where the market with the strongest growth pattern is the Mornington Peninsula.
In Brisbane and Adelaide, which are less advanced in the property cycle from the two biggest cities, we’re also seeing middle ring and outer ring suburbs putting their hands up.
Brisbane’s run, which started with the inner and middle-ring suburbs north of the CBD, as well as the inner-city apartment market, is starting to spread. The Moreton Bay municipality, which encompasses the northern growth corridor heading up towards the Sunshine Coast, has emerged strongly as a growth market.
So too has Logan City, which provides a suburban bridge between Brisbane City and the Gold Coast in the south. Ipswich, in the far south-west, is lagging a little, but starting to show signs of life.
Adelaide is being largely overlooked in discussions about property booms, but the South Australian capital is on a pronounced upward trajectory, with rising sales volumes evident since the start of the year.
Based on sales volumes in the June quarter, which point to price reactions later in the year, the growth markets in Adelaide are all bottom end and middle market. It’s the more affordable areas leading the city’s charge.
The Onkaparinga local government area in the far south, which has been one of the few population growth stars in South Australia, is once again a standout. This includes affordable seaside suburbs like Aldinga Beach and Seaford.
In fact, we have rated Aldinga Beach in the Price Predictor Index as one of the top five growth markets in the nation, with sales levels doubling in the past 15 months.
Another of the national top five is the much-maligned south-west Sydney suburb of Macquarie Fields, which is known to many for all the wrong reasons (including the 2005 riots). But sales rates have almost doubled in past year or so and that generated a 7% rise in its median house price in the June quarter.
Macquarie Fields is one of many suburbs in the Camden and Campbelltown LGAs where sales activity has risen, as the market momentum has switched from the silvertails to the fibro dwellers.