(Realestate) – Knowing the right time to buy and sell in property makes all the difference when it comes to getting the healthy return all buyers are after.When is the best time to sell or buy? Property cycles explained
When buyers hear about high price growth in an area, it’s not uncommon for them to be remorseful for not jumping on the opportunity earlier. Even five years later, some suburbs are showing a strong return on investment.
data shows that when it comes to the highest price growth over the last five years, Mickleham in Victoria is the clear winner.
How did your suburb do over the last five years? Use this interactive to find out…
The data compares median price growth in suburbs across Australia for the 12 months to 31 August 2014 against the same data set for the 12 months to 31 August 2019. To meet the data requirements, each neighbourhood had to have a minimum of 10 sales in both 2014 and 2019.
There is no data available for the Northern Territory.
This property in Hartney Avenue, Mickleham sold for $580,000 earlier this month. In 2015, that property sold for $198,000.
Savvy buyers who purchased a property in Mickleham in 2014 at the median price of $185,000 now own a home with a median price of $501,500, which is a 171% increase.
Gledswood Hills, the newly established suburb in Macarthur, which also has a station for the new NorthWest train line into Sydney, is the area that saw the second highest price growth in Australia over that five year period, with values going up by 132%.
Buyers who bought in this area early at the median price of $326,000 in 2014 now own a home with a median price of $755,000.
North Kellyville rounds out the top three best growth suburbs over the last five years, with buyers who purchased a property in 2014 at the suburb’s median price of $457,950 now owning a home with a median price of $1,045,000 – that price has grown by 128%.
For some areas which made the national top ten, five years ago buyers would have been purchasing lots or house and land packages compared to 2019 when these now established neighbourhoods have residential homes.
The findings aren’t surprising to realestate.com.au chief economist Nerida Conisbee.
“The reason is that a lot of them (in the national top ten) have new estates. So we’ve had significant change in the housing stock, so that bit is not surprising.
“But there are a few surprises such as Rose Bay, a premium suburb doing very well. It’s quite consistent though with what we’re seeing on site on realestate.com.au with Rose Bay and Collaroy having big (price) jumps,” she says.
“We’ve been seeing for quite some time very, very high views per listing for premium parts of the market.”
Investment in infrastructure and better transport links are making some growth areas that feature on the list much more attractive to buyers.
“There’s been a lot of investment in those areas, whether it’s public transport or better retail or new schools. So it’s partly because the housing stock has improved and partly because the local area has improved,” she says.Five things to consider when buying into a regional area
Sorrento on the Mornington Peninsula made the national top ten of top growth suburbs for the past five years, and over this time the suburb has shifted from beach holiday town to commuter hub.
“When we talk about commute times, I think that’s what’s happened in Sorrento and the Mornington Peninsula. More and more people are living down there as opposed to having it as just a weekender,” she says.
Conisbee nominates beach towns within a two-hour commute of Melbourne as areas likely to see solid price growth over the next five years, similar to beach areas on the central coast of NSW.
“So the Mornington Peninsula, Geelong and even the surf coast – we’ve also seen very, very strong demand. And places like Geelong will be boosted by potentially seeing a fast train from Geelong to the city. That will also make a bit of a difference there,” she says.
How to keep track of your property’s value
For those who didn’t buy in these top growth areas five years ago, where should they be looking now?
Conisbee says she wishes she bought in Hobart five years ago; the low price point means the return would have been impressive.
Suburbs to the west of both Melbourne and Sydney are ones she thinks will take off in the next five years.
“Long term, the fundamentals of property drive price growth. Over the past five years, it has been Melbourne that has performed the best. Over 10 years, it has been Sydney. In both cities, it has been high growth areas to the west.
“This is where high levels of population growth have occurred. The bigger cities also have more diverse economies, which means they are less prone to boom/bust cycles of smaller cities and regions,” she says.
And how long should owners hold onto a home before selling?
The hidden costs of buying a home
Price growth in property is a long-term prospect and home owners should look to hold onto their home for “as long as possible”, Conisbee says.
“If you try and buy and sell within two years, you’re probably not going to do too well. But if you can extend that out significantly, you will do a lot better.”
Understanding the price cycle for your area is important.
This home in Balgowlah sold recently.
“Property isn’t an asset class that does well short-term, partly it doesn’t do well short-term because there are so many transaction costs like stamp duty. Every part of Australia moves under different lengths of property cycles,” she says.
For example, this Balgowlah home sold for $651,500 in 2000 and sold at auction September 14 this year for $2,903,000.
Over 19 years, this particular property has increased in price over four fold.