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Suburban home prices approach new highs

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House prices in more than a dozen suburbs in Sydney and Melbourne are set to reach new highs.

Supply shortages and increased competition among buyers are accelerating the pace of price increases, according to CoreLogic data.

Home prices hit record highs in nearly two of the nation’s top five suburbs last month.

In Brisbane and Adelaide, nearly nine in 10 housing markets have already surpassed their previous highs.

Similarly, eight in 10 unit markets in Perth and more than one in five in Sydney have peaked.

in AFR articleEliza Owen, head of research at CoreLogic, said unit prices were likely to continue to rise faster than house prices as more buyers sought cheaper housing options.

She said:

“Property price growth is beginning to outpace house price growth in most capital cities.

This could reflect people trying to conserve capital by purchasing cheaper asset types.

The trend is particularly evident in popular areas such as Sydney’s inner city and inner west, where a lack of availability of detached homes is shifting demand towards the modular market.

“We may be reaching a point in the cycle where rising home prices could lead to faster growth in units than housing.”

Harbour City Prices

In Sydney, the inner west and inner south west suburbs top the list of housing markets poised to reach new highs.

This includes Enfield, Strathfield, Newtown, Chiswick and Liberty Grove in the inner west, and Revesby, Oatley and Greenacres in the inner south west.

Western Sydney suburbs such as Girraween, Rooty Hill, Northmead and St Marys are also expected to hit new record highs, as is Thornleigh on the upper North Shore.

Enfield, for example, had an average price of $761,007, just 0.3 percent, or $2,040, shy of hitting a new record high for the first time in nearly nine years.

If recent quarterly growth rates of 2.2% and monthly increases of 1.8% continue, house prices in the suburb could surpass their all-time high by next month.

Property prices in Strathfield have risen 3.4% over the past three months, just 0.2% ($1,242) above the record set nearly seven years ago.

This is a marked turnaround from a 0.2% decline in the previous quarter. Last month alone, unit prices increased by 1.8%.

Newtown property prices only need to increase by just 0.4%, or $3,432, to surpass the all-time high recorded two years ago.

Growth also picked up momentum over the past three months, increasing 3.4% after a 1.8% decline in the previous quarter.

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