The Aussie suburbs where house prices have soared despite aggressive interest rate rises

The suburbs of Australia’s biggest cities have seen double-digit price increases over the past year, despite aggressive rate hikes from the Reserve Bank.

A new CoreLogic report shows that 82.4 percent of Australia’s 4,506 suburbs with houses and units saw price increases in the three months to October.

That increase came before the Reserve Bank of Australia raised rates for the 13th time in 18 months in November, after a pause since July, taking the cash rate to a 12-year high of 4.35 percent.

With immigration at record levels, the suburbs of Sydney, Melbourne, Brisbane, Adelaide and Perth have seen double-digit price increases over the past year, with large increases also seen in the past three months.

Eliza Owen, head of research at CoreLogic, said strong population growth was causing house prices to rise “despite high interest rates and weakening economic conditions”.

“Migration trends from both abroad and interstate regions are driving increased demand for housing,” she said.

CoreLogic’s head of research, Eliza Owen, said strong population growth was causing house prices to rise ‘despite high interest rates and weakening economic conditions’ (pictured is a map of Sydney showing a slew of suburbs with strong annual price growth)

In Sydney’s north, house prices in Thornleigh rose 19.7 per cent over the year and 3.3 per cent in the quarter to $1.848 million.

In Strathfield, in the city’s inner west, the average house price rose by 15.3 per cent in the past year, and by 4.6 per cent quarter on quarter, to $3.627 million.

Nearby Five Dock, on the Parramatta River, saw an 8.4 per cent increase in three months, taking its median price to $2.691 million.

These suburbs are significantly above Sydney’s median value of $1.397 million, in a city that receives a higher proportion of foreign migrants and international students.

But the big increases weren’t limited to wealthy postcodes either: house prices in Bankstown, in the city’s south-west, rose 15 per cent over the year and 3 per cent in three months to $1.341 million.

The story was similar in Blacktown, in the city’s west, where prices rose 14.1 per cent over the year and 2.7 per cent in the quarter to $939,829.

In Melbourne, Murrumbeena, in the city’s south-east, saw the average house price rise 12.4 per cent over the year and 3.7 per cent in three months to $1.722 million.

This was much stronger than Melbourne’s 2.2 per cent annual increase, bringing the average house price to $937,736.

In Brisbane, double-digit increases were far more common in a city that owes more population growth to interstate rather than overseas migration.

Mid-range postcodes saw big increases, with house prices in Macgregor rising 19.7 per cent over the year and 9.3 per cent in three months to $1.556 million.

In Coorparoo, in the south of the city, house prices rose 15 percent mid-year and 7.3 percent in three months to $1.538 million.

This posh suburb is significantly more expensive than central Brisbane, which costs $860,465.

The more affordable satellite city of Logan is also rising in value, with home prices in Meadowbrook rising 14.9 percent over the year and 7.6 percent in three months to $697,994.

On the Gold Coast, house prices in Gilston have risen 17 per cent annually and 4.5 per cent in three months to $1.081 million.

Adelaide also saw double-digit price increases, with Taperoo beach house prices rising 12.7 per cent over the year and 8.5 per cent quarter-on-quarter to $617,139.

In Brisbane, double-digit increases were far more common in a city that owes more population growth to interstate rather than overseas migration.

In the city’s inner east, house prices in Toorak Gardens have risen 12.3 per cent annually and 8.9 per cent in three months to $2.295 million, making it by far the most expensive postcode in the South Australian capital.

Perth is also a booming market, with prices at Yokine in the city’s north rising 17.3 per cent in the past year, and 5.6 per cent in the last quarter, to $842,876.

More than 400,000 net migrants moved to Australia in the year to August.

If this continues, the overseas influx of skilled migrants and international students would exceed the Treasury’s forecast of 315,000 arrivals by 2023-2024.

Australia’s inflation rate of 5.4 percent in the year to September is the highest in the OECD after New Zealand and significantly above the RBA’s target of 2 to 3 percent.