Australian Property Prices Rebound, Secondary Cities Present Investment Opportunities

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According to the most recent data from CoreLogic, dwelling values in May experienced a 0.5% upswing, signalling the third consecutive month of price growth.

Tim Lawless, CoreLogic’s head of research, emphasises the luxury market’s recovery potential, given the significant drop in values experienced by the top 10% of the market during the recent cycle.

“For people trying to get into that quite prestigious end of the marketplace, they’ve got a good opportunity now to get in while prices are well below what they used to be,” Lawless said. 

Despite rising interest rates, the market’s response remains uncertain. The Reserve Bank of Australia completed a 10-month campaign of rate increases from May 2022 to February 2023. After a brief pause in April, two additional rate hikes of 0.25% each were implemented in May and June, resulting in the highest cash rate in 11 years at 4.1%.

According to Knight Frank’s Australian Prime Residential Review, alternative Australian cities like Gold Coast, Adelaide, and Perth show growth potential. These luxury markets are predicted to perform strongly in the coming year, offering alternatives to the well-known Sydney and Melbourne markets.

Knight Frank defines “prime” residential property as the top 5% by value, equal to A$2 million (US$1.36 million) for the Gold Coast. Despite lower sales volume in late 2022, Gold Coast prime residential values grew the most in Australia, up 4.1% annually, ranking 14th globally. Knight Frank predicts a 3% annual price increase for the Gold Coast over the next three years.

“Now we’re seeing an undercurrent that won’t be as affected as we have been. Some substantial wealth is driving the local economy, and construction is still happening,” Frank said.

As property prices in Australia gradually rebound, investors and home buyers have a unique opportunity to explore secondary cities, such as the Gold Coast, before values climb back to their previous heights. 

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