• Domain has analysed how prices in each of the east coast capital cities fared over the last two years.
• While exposed to different property cycles, analysts Nicola Powell and Henry Yu found that the most expensive suburbs both fell the hardest during troughs and led the market higher during booms.
• These are how different suburbs in each city made out.
• Visit Business Insider Australia’s homepage for more stories.

After a couple of tumultuous years, Australia’s largest property markets look to be rebounding strongly – but some suburbs are doing far better than others.

Sydney, Melbourne, and Brisbane might all setting record highs, but as a flood of newly-energised buyers enter the market, they’ll find a large divide has opened up between certain suburbs.

New analysis from Domain shows that within the same capital cities, suburbs have diverged greatly between the fastest-growing postcodes and the back of the pack.

“We have found, by mapping price movements at a suburb level over the past two years, suburbs with the highest prices tend to lead these cycles,” research analysts Nicola Powell and Henry Yu said.

This is how different areas fared in each city.

Sydney

Home to some of the country’s most expensive real estate, it’s unsurprising to see Sydney produce the biggest discrepancy between suburbs, especially given the last few years.

Property prices came off a 2017 peak to slump into mid-2019, shaving almost $165,000 off the median house price, according to Domain data. Nearly one in three Sydney suburbs fell by double digits, with suburbs like Kogarah, Abbotsford, Belfield and Lidcombe falling hardest.

While some would languish much longer, suburbs like Asquith, Birchgrove, Hunters Hill, Rose Bay and Summer Hill all began bouncing in the 2019 June quarter. Equally, prices in the city, east, Inner West, Lower North Shore, Northern Beaches and Upper North Shore all began moving higher soon after.

The beginning of the pandemic put that market recovery on ice until mid-2020. In the second half of the year, “house prices rose across almost all of Sydney suburbs, with 94% having growth.”

Ultimately, Alexandria in the inner city proved the fastest-growing market, with house prices jumping 30.6%. Contrast that with Marsfield, where prices actually fell 10.1% during the slump.

Meanwhile, economists are expecting the market to continue surging, with ANZ expecting house prices to jump 19% this year.

Melbourne

Melbourne prices hit the bottom of their trough in early-mid 2019, with house prices having fallen approximately 10%, or by around $90,000.

Just as in Sydney, the city’s more expensive inner suburbs were the ones to both fall the hardest and begin recovering the quickest. Armadale and Caulfield North were the first to beginning ticking up between June and September, signalling the bottom of the market.

“By December 2019, 70% of inner urban suburbs experienced growth. This growth spread across the inner east and inner south with 38% and 42% of suburbs growing annually in median price by the end of 2019,” Powell and Yu said.

The biggest gains were witnessed in South Yarra, Toorak and Hawthorn as Melbourne set a new peak in March 2020 before the impact of the pandemic was felt. The cool off was short-lived as the median house price hit a new record high of $936,000.

“By December, substantial price rises were recorded in Portsea, Flinders, Ventnor, Blairgowrie, McCrae and San Remo on the Mornington Peninsula,” Powell and Yu said.

However, they note that “very few have shown sustained and constant annual growth over the past two years”, with just Bacchus Marsh, Capel Sound, Darley, Diggers Rest, Manor Lakes, Mickleham, The Basin, Werribee, Wollert and Yarra Glen doing so.

ANZ economists are now forecasting 16% house price growth as the market begins to rebound strongly.

Brisbane

Unlike the other two cities, Brisbane was in fact nearing a peak in early 2019, as house prices were racking up their sixth year of consecutive growth.

Across the city more than 60% of suburbs were seeing price growth, with the suburbs of Hamilton, Burpengary East, Robertson and North Ipswich leading the market higher.

In mid-2019 the city began running out of steam with house prices falling slightly across the city and suburbs like Teneriffe, Fig Tree Pocket and Chuwar recording falls of more than 15%.

However, in stark contrast to Sydney and Melbourne, Brisbane barely took a knock during the pandemic. Two-thirds of all suburbs actually saw prices rise in the middle of the year, as suburbs like Fig Tree Pocket, Samford Valley and Grange began to bounce.

At the same time the easy money policies that helped put a floor under prices elsewhere actually helped accelerate Brisbane’s growth streak.

“First-home buyers became active utilising incentives and low mortgage rates became the norm. Upsizing buyers were enticed by cheaper credit and altered their wish-lists to think more about property characteristics such as space and lifestyle, rather than commute time and distance to the CBD,” Powell and Yu said.

Brisbane set a new peak at the end of 2020, up 5.6% on the previous year. However, prices trends diverged across the city.

“Despite most suburbs prospering across Brisbane, 15% of suburbs recorded a fall in the median house price by December 2020. The deepest fall of 8% was in Ormiston and Burpengary East,” Powell and Yu said.

“Some of the strongest rates of growth were recorded in Thorneside, Virginia, Highgate Hill, Carina Heights and Yeronga, with house prices surging more than 20% annually.

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