The suburbs bracing for major price growth as buyer demand explodes

Demand has surged in housing hotspots around the country, with both investors and homebuyers chasing rapid price growth as interest rates fall.

New data from PropTrack shows interest from serious buyers has skyrocketed in a diverse range of suburbs in both capital cities and regional areas across Australia, with one state making a resurgence after years languishing behind the rest of the nation.

Levels of buyer demand have doubled in several suburbs, suggesting property prices could take off as a result.

The data reveals the average number of key enquiries per property listing on realestate.com.au in each suburb, which is a measure used to gauge the level of buyer demand in an area.

The number of key enquiries — which combines high-intent actions such as emailing an enquiry, calling the agent or downloading documents — can reveal how in-demand a suburb is with serious buyers who are ready to purchase a property.

Houses for sale in the past year received 41 enquiries on average at the national level, while units received 40 enquiries, but rates of enquiry were highest in Sydney, followed by Brisbane, Adelaide and Perth.

Tracking how enquiries per listing have changed compared to a year ago can pinpoint where buyer demand is increasing, with property prices expected to follow suit.

REA Group senior economist Eleanor Creagh said a rise in enquiries was a sign buyer demand and competition was increasing, potentially leading to higher prices.

“An increase in enquiries per listing is an indicator that buyer demand is intensifying relative to the supply of homes available for sale,” she said. 

“When more buyers are competing for each property, this heightened competition typically places upward pressure on prices.”

“While not a guarantee, sustained increases in enquiries per listing often foreshadow increased competition and potentially price growth in those markets.”

Where buyer demand is surging

The data shows enquiries per listing increased in 59% of Australian suburbs, although there were some hotspots where the level of demand has more than doubled.

Suburbs with surging demand were found in every capital city across Australia, as well as major regional cities, but there’s one thing most of these areas have in common – affordable property prices.

Affordable suburbs have increasingly been on the radar for both homebuyers and investors in recent years amid the high interest rate environment, and even with rates now declining, buyers are still seeking cheaper options.

Melbourne in the spotlight as investors swoop in

Victoria has emerged as a hotspot for buyer demand, with the state home to a high concentration of suburbs where demand has risen.

Buyer demand for houses has increased in 90% of Melbourne suburbs compared to a year ago – a much greater proportion than in any other capital city. By comparison, demand rose in just 39% of Sydney suburbs.

The average number of enquiries per listing in Melbourne is up 22% year-on-year, but enquiries have increased much more rapidly in many outer suburbs.

Rising demand across Melbourne reflected improved affordability relative to the other major cities, Ms Creagh said. 

“After lagging other capitals throughout much of the past five years, Melbourne is now comparatively affordable and is seeing demand catch up, with buyers viewing it as offering relative value and long-term appeal,” she said.

“Population growth is underpinned by migration, while easing interest rates are boosting borrowing capacity.”

The Melbourne suburbs where demand has surged were largely located in the city’s outer areas, where houses were typically more affordable.

Enquiries per listing have more than doubled in suburbs such Campbellfield and Dallas in the north, which are among the most affordable suburbs in the entire city.

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Real estate agent and auctioneer Richard Ali of Barry Plant Glenroy said most of the active buyers in the area were interstate investors, with the increased demand pushing prices higher.

“We have a lot of buyers from Sydney now who have been trying to purchase,” he said. “They are paying more than what the local buyers are willing to pay to secure something.”

Enquiries surge in affordable regional centres

It’s not just in Melbourne where demand has jumped – suburbs in many regional Victorian cities such as Bendigo, Ballarat, Geelong and Mildura show higher levels of enquiry than a year ago.

Ms Creagh said regional centres in both Victoria and New South Wales were in high demand, with buyers seeking a combination of affordability, lifestyle and investment appeal.

“These areas often offer larger homes at lower price points than the capitals – a motivator with affordability at historically low levels.”

Attractive local economies and good access to infrastructure were also part of the equation, Ms Creagh said.

“Many have benefited from ongoing migration trends post-pandemic, with buyers still valuing space, relative affordability, and improved hybrid working arrangements,” she said.

Albury real estate agent Clinton Gilson of Gilson Yonson Real Estate said buyers’ agents and investors were competing with first-home buyers, particularly in more-affordable suburbs such as Lavington and North Albury.

“It’s just crazy,” he said. “Every property we have is selling over the asking price. I had one yesterday that had 18 offers and sold $87,000 above what we appraised it at.”

Competition heats up in Western Sydney

The Sydney suburbs where demand has surged tended to be located in the city’s west and south west, including St Johns Park and Lansvale where houses that come on the market typically get more than 100 enquiries.

Interest has also surged in areas such as the Central Coast and outer south west.

Ms Creagh said many buyers were gravitating towards suburbs where their money went further, even if it meant a longer commute.

“These markets provide more affordable entry points compared with the inner city, which is particularly appealing at a time when borrowing capacity has only just begun to recover after two years of rate rises,” she said.

Although more buyers have sought less-expensive suburbs recently, demand in many premium markets remains strong, with Rose Bay, Bellevue Hill and Bronte among ranking among the top 10 suburbs for overall enquiries for houses, while Kirribilli and Double Bay ranked highly for units.

Demand strengthens in Hobart and Darwin

In the smaller capitals of Darwin and Hobart, enquiries have increased in the vast majority of suburbs, which was an indication that demand was strengthening, Ms Creagh said.

Driver and Bellamack had the biggest lift in enquiries in Darwin, while in Hobart, Montrose and North Hobart topped the charts, although most of the Tasmanian suburbs with biggest jumps in demand were outside the capital.

“Provided the lift in enquiries is sustained, this typically translates into greater competition among buyers and potentially higher prices in the months ahead,” Ms Creagh said.

The post The suburbs bracing for major price growth as buyer demand explodes appeared first on realestate.com.au.