Sweet relief was expected for home buyers with the market slowing, but areas across Australia are still predicted to skyrocket.
House prices are set to soar in 20 suburbs across Australia due to a shortage of available properties on the market, new research has found.
Despite signs that the housing market is finally starting to slow down with some suburbs recording a whopping $190,000 drop in value, there are areas across NSW, ACT, South Australia and Victoria that desperately need new listings to prevent a jump in prices.
Sydney suburbs impacted include affluent Mosman, North Sydney, Stanmore in the inner west and Freshwater on the northern beaches, while the coastal towns of Fairy Meadow, Corrimal and Dapto in the Illawarra region could also see prices rise.
A meagre 1.1 per cent of homes changed hands in North Sydney and Mosman in the last 12 months, causing prices to skyrocket by up to 32 per cent, yet there is no relief in sight with listings further dropping.
In Stanmore, only 5.7 per cent of the properties in the suburb were sold in the past 12 months, pushing up prices by an extraordinary 28 per cent, yet a drop in listing means competition for homes will be further exacerbated.
Other Sydney's suburbs are also badly impacted with predicted price rises in Menai and Bangor in the south, alongside the northern areas of Cromer and Collaroy.
The northern beaches suburbs of Freshwater and Collaroy have only had 4.7 per cent of properties in the area listed for sale, resulting in prices being driven up 27 per cent and 39 per cent respectively.
In Victoria, regional areas including the suburbs of Belmont and Highton in Geelong as well as Croydon Hills in Maroondah all have low stock levels.
The research from tech platform Hood.ai found these markets' inventory levels were under one month, which is extraordinarily low.
This means that if no properties were listed for sale from today onwards, then there would be nothing available to purchase in those suburbs within the next three to four weeks.
'Fierce competition'
Kent Lardner, director of Suburbtrends.com, said people looking to buy in these suburbs face “fierce competition”, particularly against homeowners who might be selling up in Sydney and moving to regional areas.
“They are the ones that are really driving the big leaps in prices where they can outbid the competition,” he told news.com.au.
“Those who do get to sell in Sydney and move to south east Queensland or regional NSW they are the ones ultimately driving up the prices in these very tight markets.”
But Lardner doesn't expect any relief in these suburbs as available land has dried up.
“There are very few of these tight held suburbs that are surrounded by land, whereas you've got other markets that could be resolved with a tick of a pen by the opening up of land, such as in Orange,” he explained.
“But a lot of these markets like Corrimal has the ocean on one side and escarpment on the other, so there is on where to go and there is no available land. Dapto is the same and North Sydney is an obvious one.
“Menai in its day was a house and land area but it's pretty much all filled now.
“I think a lot of this is driven by the way we have chosen to build all suburbs along the coastline and I think we are paying the price for that as a maturing country, as we are building in the wrong spots.”
Prices soar by double digits
Out of the 20 most undersupplied markets, 13 suburbs have recorded a sharp drop in inventory to less than one month while 14 were tightly held, with stock turnover levels at 4.8 per cent or less.
Hood.ai founder and CEO Tommy Fraser said buyers who want to move to these 20 suburbs are struggling because owners just aren't selling.
“Part of the reason Australia has been experiencing a property boom is because stock levels have been low, which has forced buyers to compete harder and bid up prices,” he said.
“That story has really played out in these 20 suburbs, where inventory levels have been incredibly low over the past year. As a result, the median house price of most of these
suburbs has experienced a double-digit percentage increase over the past year.
“Buyers desperately need new stock to come onto the market in all these suburbs, because, right now, they're in a terrible bind. When a house comes onto the market, do they offer a fair price and risk missing out? Or do they do whatever it takes to win the property but overpay?”
Other undersupplied areas included Conder, Evatt, Amaroo and Kambah in the ACT and Salisbury Heights and Flagstaff Hill in South Australia.
Fraser added it would be great to return to a balanced market, which would typically have four to five months worth of stock available.
“For that to happen, these 20 suburbs need to see a significant increase in new listings,” he warned.
**Source: Sarah Sharples - news.com.au