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New research has uncovered how the housing market recovered following the last major economic downturn.
Property Investment Professionals of Australia (PIPA) and CoreLogic found that capital city dwelling values increased by up to 39 per cent from the end of December 2008, while regional Australia grew by 65 per cent.
CoreLogic head of research Tim Lawless said it was unsurprising that mining areas performed well given the resources sector was firing on all cylinders at the time.
“Areas such as mining towns, where economic conditions are dependent on a single industry, are much more likely to experience bursts of price rises or falls because of the strength or weakness of their dominant industries,” he said.
“While many of these mining regions recorded spectacular capital gains post-GFC, a few years later many of these same regions recorded a crash in home values.”
Unsurprisingly, Sydney was the strongest growing capital city, with six of the top 10 suburbs residing in the inner and outer belt of the harbour city.
“The dominance of Sydney in the results shows that nobody rings the bell to tell you when the upward swing of a property cycle has started,” PIPA chairman Peter Koulizos said.
“When you do hear it, it’s too late because it’s already begun.”
Mr Koulizos noted that it has dispelled the popular belief that Sydney only grew in 2012 when the global economy had fully recovered.
While Sydney had six of the top 10 changes in capital city dwelling values, Rosebery Palmerston in the Northern Territory and Forde in the ACT took out the gold and silver medal.
This was followed by the inner-west suburb of Canterbury-Bankstown, Abbotsford in Victoria and Cabramatta in Sydney.
Mr Koulizos said the individual capital city results were varied, depending on the location, with Melbourne’s best performers being inner areas, while Adelaide’s were those located in outer suburbs. During that period of time, the number of first home buyers also hit historic highs because of the federal government’s First Home Owners Boost, he said.
“The recovery in the property market was broad, varying from inner-city to outer-city suburbs,” Mr Koulizos said.
“Certainly, first home buyers helped by boosting demand for new properties, whether they were located in urban regeneration or greenfield sites.”
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