Suburbs with surging house prices revealed

Australia’s rising population is pushing up property values in unexpected suburbs, where development potential is proving more influential than traditional prestige. Older homes on large blocks near transport and job hubs are outperforming city averages, and this trend is likely to continue as a new wave of home building begins.

In the past, suburbs near central business districts were generally expected to lead capital growth. However, affordability concerns and recent planning changes are shifting attention to outer and middle-ring suburbs. These areas, especially those with larger land parcels and future redevelopment potential, are currently showing some of the highest price increases in cities such as Sydney, Melbourne and Brisbane.

New data from a national property investment firm reveals that older homes on well-located land rose 7% in Sydney over the past financial year, more than twice the city's average increase of 3.3%. Melbourne saw a rise of 6% compared to a citywide average of 1.6%, while similar homes in Brisbane jumped 8.2%, outperforming the city's overall 7% increase.

With an 11.7% quarterly rise in new housing starts, there is some hope that added supply may relieve affordability pressures. Still, the impact of this growth will differ depending on each suburb’s location, available infrastructure and buyer borrowing power. In middle and inner suburbs, land scarcity is already driving up demand and prices.

In markets like Sydney, increasing land values are encouraging property owners to combine and sell their lots as redevelopment-ready sites. Suburbs such as Windsor, Tarneit and New Beith are seeing strong capital gains, driven more by high demand for land than interest in the existing houses. In some cases, values have increased 10 to 18 times over a 25-year period.

Changes in planning regulations, expanded infrastructure and evolving buyer preferences are helping to close the price gap between outer and inner suburbs. Land with development potential, even outside central locations, is fast becoming Australia's new benchmark for property investment.

Source: Australian Financial Review, MPA, Australian Broker 

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