What the best and worst price growth suburbs tells us about the property market right now

While Perth’s outer suburbs are doing well because of high construction costs, it is then curious that Melbourne’s outer suburbs are not seeing a similar trend and are in fact the poorest performing suburbs in the country. It is likely general weakness in the Melbourne market is at least partly to blame. While Perth’s prices are up over 20 per cent over the past 12 months, Melbourne’s are up just 5.5 per cent. Melbourne’s outer suburbs are not performing that well on a national basis but compared to Melbourne as a whole, the gap is far more narrow.

On a capital city basis, there are some further interesting trends. In all capital cities, with the exception of Melbourne, the top performing suburbs in percentage terms are outer suburban while luxury suburbs are seeing comparably much lower growth, reflecting the cheaper to buy than build driver. In Perth, Peppermint Grove is seeing a strong 12.1 per cent growth but this is much lower than Maddington’s 26.7 per cent. In Sydney, Lethbridge Park in the outer west has seen prices increase by 9.2 per cent, one of the strongest in the city. The poorest performer has been Mosman-North where prices are up 6.2 per cent.

In Melbourne, low cost suburbs are seeing weak growth while the top performers are medium to high priced suburbs like Templestowe and Ringwood North, almost the exact opposite to the rest of the country.

March inflation came in at 3.6 per cent last week, still higher than the Reserve Bank of Australia target range of between 2 and 3 per cent. A rate cut is coming but its likely date is getting pushed out to later in the year, or even next. Regardless, the onward march of Australian house prices continues however with some distinct regional differences.