Perth’s property market hot streak fizzles out as Melbourne, Brisbane, and Sydney take lead

In a remarkable shift within the Australian real estate landscape, Perth’s property market, once a beacon of growth, seems to have dimmed as the nation’s three largest cities—Melbourne, Brisbane, and Sydney—reclaim their status as the performance powerhouses. The Summer 2023 edition of the Hotspotting Price Predictor Index (PPI) reveals this significant change in momentum.

Terry Ryder, the Director of Hotspotting, acknowledged the shift by stating, “The WA capital has been our strongest market for the past year and a growth market for longer, but this survey finds the first signs of slowdown.” He further elaborated on Perth’s diminishing dominance, “Three months ago, some 79 per cent of suburbs had momentum in Perth, but now only 54 per cent do, following a jump in plateau markets, which are those that are no longer rising and starting to taper off.”

Melbourne is surging ahead, with Hotspotting General Manager Tim Graham noting, “Six months ago, we reported a glimmer of recovery, three months ago we recorded an emphatic revival and now Melbourne is the nation’s strongest market with 87 per cent of suburbs having positive trends.” Sydney and Brisbane are close on Melbourne’s heels with promising signs of their own.

Regional Queensland is igniting interest once more, with places like the Gold Coast, Gladstone, and Mackay demonstrating considerable activity. Ryder points out the strength of this market: “Three-quarters of locations have positive classifications, headed by a resurgent Gold Coast and including Central Queensland centres.”

Notably, the Canterbury-Bankstown area in NSW has been highlighted for its exceptional real estate performance—every suburb examined boasted positive rankings, with the majority classed as rising markets. Meanwhile, Blakeview in South Australia’s City of Playford has emerged as a model of consistency, experiencing a steady climb in average house prices.

Disproving the grim forecasts of economists who predicted property price drops due to rising interest rates, Mr. Ryder asserts, “Sales activity and prices have become stronger as the year has evolved.” In a show of market resilience, a mere four per cent of suburbs are considered to be in decline.

A multifaceted momentum is observable across metropolitan and regional areas, challenging the often singular narrative of city-versus-regional growth. The Big Three—Melbourne, Brisbane, and Sydney—are experiencing pronounced positivity in the property market. Conversely, markets such as Canberra and Darwin are lagging, with Ryder pointing out that “The [ACT] and the Northern Territory [are] having the nation’s weakest economies.”

Amongst the trends of 2023, units have risen in popularity, challenging the traditional belief in the superior capital growth of houses. Graham notes, “Suburbs where apartments dominate the dwelling mix are among the most powerful markets in Australia.”

Yet, not all locations have thrived. The Price Predictor Index observes a cooldown in former hotspots like Byron Bay, the Mornington Peninsula, and the Central Coast—areas that had experienced spikes in property prices during the pandemic-induced boom.

Municipalities such as Brisbane North, Casey, Gold Coast, Melbourne City, and Sydney City have maintained their top positions, while others like Brisbane Inner, Canterbury-Bankstown, Greater Geelong, and Whitehorse have emerged strongly, indicating a market landscape that celebrates established stability as well as dynamic emergence.

In sum, the Summer 2023 Hotspotting PPI paints a nuanced picture of the Australian real estate sector—one where adaptability and regional variation are key players in the ongoing saga of property performance.