Along the East Coast, our capital city markets were characterised by a substantial decrease in the rate of property price growth in Sydney and Melbourne, with a much smaller decline in Brisbane. 

In 2017, Sydney house prices went up 2.1% compared to 16.7% in 2016, according to CoreLogic figures. Melbourne house values rose by 9.1% in 2017, which was well off the 15.1% recorded in 2016. In Brisbane, price growth declined just a little – it was 3.1% in 2017 compared to 4% in 2016.

In citywide terms, the boom markets of Sydney and Melbourne began to cool in 2017 but plenty of suburbs still experienced great growth, as shown in CoreLogic’s Best of the Best Report 2017.

What we tend to see at the end of booms is a declining rate of growth citywide but ongoing demand and strong prices still being achieved in the best suburbs for the better-quality properties. The best suburbs could be defined as those offering a great lifestyle, close proximity to jobs or affordability.

At this time in the cycle, buyers become more discerning and are less willing to compete for ‘B’ or ‘C’ grade properties.

For example, Sydney house prices might have only grown by 2.1% overall last year but in the blue ribbon harbourside suburb of McMahons Point on the Lower North Shore, they went up by 45%.

McMahons Point offers a great lifestyle with plenty of cafes, restaurants, shops and sought-after schools close by. It also has excellent transport links for the 10 minute commute into the CBD. It was the No 1 suburb for house price growth nationally last year.

Let’s look at the other best performing suburbs for both house and apartment price growth in 2017.             

SYDNEY

Best growth in median values – Houses

  1. McMahons Point 45%
  2. North Sydney 36.5%
  3. Kemps Creek 36.4%
  4. Cammeray 35.3%
  5. Bringelly 34.6%

Best growth in median values – Apartments

  1. McMahons Point 45.6%
  2. The Rocks 45.1%
  3. Birchgrove 37.7%
  4. Beecroft 31.7%
  5. North Sydney 31.4%

MELBOURNE

Best growth in median values – Houses

  • North Melbourne 41.6%
  • Frankston North 37.6%
  • Ardeer 37.1%
  • Jacana 33.7%
  • Broadmeadows 32.8%

Best growth in median values – Apartments

  1. Watsonia 36.7%
  2. Ardeer 34%
  3. Clarinda 33.8%
  4. Fitzroy 33.3%
  5. Capel Sound 32.2%

BRISBANE

Best growth in median values – Houses

  1. Yeronga 25.4%
  2. Mount Mee 25.2%
  3. Sheldon 17.3%
  4. Taringa 17.2%
  5. Yeerongpilly 15.6%

Best growth in median values – Apartments

  1. Ormiston 15.7%
  2. Rochedale South 12.8%
  3. Caboolture South 11.5%
  4. Raceview 11.2%
  5. Corinda 11.2%

Some other figures in CoreLogic’s Best of the Best Report are also worth analysing. Here are the most affordable suburbs and the highest gross rental yields within 10km of the CBD in each capital city.

SYDNEY

Most affordable suburbs within 10km of the CBD – Houses

  1. Sydenham $1,215,465
  2. Tempe $1,230,502
  3. Arncliffe $1,237,819
  4. Turrella $1,257,490
  5. Waterloo $1,312,289

Most affordable suburbs within 10km of the CBD – Apartments

  1. Belmore $506,675
  2. Campsie $608,394
  3. Ropes Crossing $641,505
  4. Croydon Park $649,663
  5. Eastlakes $650,500

Highest gross rental yields within 10km of the CBD – Houses

  1. Waterloo 3.4%
  2. Sydenham 3.3%
  3. St Peters 3.2%
  4. North Balgowlah 3.2%
  5. Chippendale 3.2%

Highest gross rental yields within 10km of the CBD – Apartments

  1. Ultimo 4.5%
  2. Chippendale 4.5%
  3. Wolli Creek 4.4%
  4. Darlington 4.4%
  5. Arncliffe 4.3%

MELBOURNE

Most affordable suburbs within 10km of the CBD – Houses

  1. Maidstone $809,830
  2. Coburg North $824,113
  3. Footscray $869,189
  4. West Footscray $891,432
  5.  Pascoe Vale $910,216

Most affordable suburbs within 10km of the CBD – Apartments

  1. Travancore $381,962
  2. Flemington $386,972
  3. Kingsville $399,182
  4. West Footscray $401,903
  5. Carlton $409,465

Highest gross rental yields within 10km of the CBD – Houses

  1. St Kilda 4.1%
  2. South Yarra 3.5%
  3. Collingwood 3.5%
  4. Parkville 3.4%
  5. West Melbourne 3.4%

Highest gross rental yields within 10km of the CBD – Apartments

  1. Carlton 7.2%
  2. Melbourne 5.9%
  3. Travancore 5.5%
  4. Southbank 5.3%
  5. Docklands 5%

BRISBANE

Most affordable suburbs within 10km of the CBD – Houses

  1. Rocklea $411,416
  2. Keperra $530,989
  3. Salisbury $561,430
  4. Chermside West $566,838
  5. Nathan $570,835

Most affordable suburbs within 10km of the CBD – Apartments

  1. Boronia Heights $259,099
  2. Strathpine $268,265
  3. Bethania $273,680
  4. Springfield $304,753
  5. Richlands $322,770

Highest gross rental yields within 10km of the CBD – Houses

  1. Rocklea 4.8%
  2. McDowall 4.4%
  3. The Gap 4.4%
  4. Virginia 4.3%
  5. Chapel Hill 4.2%

Highest gross rental yields within 10km of the CBD – Apartments

  1.  Salisbury 6.2%
  2. Oxley 6.1%
  3.  Strathpine 6.1%
  4.  Coopers Plains 5.9%
  5.  Spring Hill 5.9%

I’m expecting a lower rate of growth in 2018 as the Sydney and Melbourne markets cool further. The East Coast capital worth watching now is Brisbane, which is overdue for stronger levels of growth.