The current direction the housing market is going appears to be defying traditional trends and logic, experts said in a recent webinar by AltX.
JPM Valuers director Jason Matigian said the prices achieved in the middle of 2020 don’t seem to be relevant anymore in the current market conditions.
"We did a valuation in Manly recently. The house next door sold for $4.1m in May or June 2020, so we put our thinking was around $4m on the property which was similar. Eventually, the property sold for $6.3m," Mr Matigian said.
"We see this across the eastern seaboard in Sydney and even once we go to the middle and the outer rings."
Regional markets' solid gains
Mr Matigian said this was also apparent in other areas.
In Queensland, for instance, some markets that were stagnant started to show signs of life recently due to changing buyer preferences.
"A coastal lifestyle has become extremely important. There’s been a significant uplift in some coastal towns. We've seen those lifestyle properties really kick up in value," he said.
In his estimates, the sea- and tree-change trends have resulted in around 25% annual growth in regional markets.
This was consistent with the latest figures from CoreLogic, which showed a 27.1% growth in the median price of regional homes in August to $493,925.
The annual growth in regional median price was faster than the average annual growth of 20.9% registered across capital cities.
"We're definitely seeing those regional markets move,” Mr Matigian said.
“They're coming off an extremely low base, trading at the same price for the last 10 years plus.”
Drivers of stellar price growth
Ray White principal Gavin Rubinstein said aside from the low-rate environment and lack of supply, the newfound appreciation for space amid the lockdowns is contributing to the current market conditions.
"A lot of people now are putting a lot more value on having and wanting space, so with a lack of lifestyle assets – something with a view or close to the beach where you can really improve your lifestyle – the numbers people are paying are insane," Mr Rubinstein said.
Preston Rowe Paterson national director Neal Ellis shared the same sentiments, saying the focus on lifestyle has changed how the market is behaving.
"If you'd asked me 20 years ago where you should invest, I never would have said go to the outer areas and have a look at what you can buy," Mr Ellis said.
"I would have suggested buy something in a city that's smaller at the same price point and you get better capital growth. But I'm not sure that applies anymore."
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