The Australian property market has defied expectations in the last five years, with some towns, particularly in New South Wales, seeing property values double despite the disruptive forces of a global pandemic and unprecedented interest rate hikes.
According to a recent report by Propertyology, 29 towns across Australia have experienced this dramatic growth, with Snowy Monaro and Broken Hill leading the pack in New South Wales. These towns have witnessed their property values rise to double what they were in January 2020.
Simon Pressley, the head of research at Propertyology, described the past five years as “the most interesting period” in the lifetimes of Australians. “We’ve lived through a global pandemic, something none of us have experienced before,” he said. Despite predictions that the market would slow due to closed borders and a stagnant population, property prices have shown strong growth.
Economists had initially believed that property growth was tied to population expansion, but as the pandemic caused a significant halt in migration, the expected downturn never materialized. “For two and a half years, there was no population growth, yet property prices surged,” Pressley explained. “This proves that property price growth isn’t solely dependent on population increases.”
Even with the fastest interest rate hikes in Australian history — the cash rate skyrocketing from 0.10% in April 2022 to 4.35% by November 2023 — the property market has remained resilient. “The factors we thought would dictate the housing market, like overseas migration and interest rates, didn’t have the expected impact,” Pressley noted.
Other NSW regions, such as Albury, Wagga Wagga, and Griffith in the Riverina, have seen property values increase by approximately 70-80%. Pressley attributes this success to the individual economic growth of these towns. “Each town’s economic health plays a crucial role. When a local economy falters, it directly affects household confidence and incomes, leading to reduced property purchases,” he said.
The Snowy Monaro region has also been a hotspot for property growth, driven by large-scale projects like Snowy 2.0, Australia’s largest renewable energy initiative. Local real estate agent Shannon Ferguson from McGrath Jindabyne noted that Cooma, in particular, has seen a surge in investment due to the influx of workers associated with the project. “Cooma has experienced a huge demand for property as contractors come to the area, and the local economy is thriving,” he said. “The town is buzzing with workers spending money in local shops, restaurants, and cafes.”
Jindabyne, another town in the Snowy Monaro region, continues to benefit from its attractive lifestyle features, including its mountains and lake, which draw people year-round, especially when snow season is successful. Ferguson cited the growing equity in properties as evidence of the area’s rising appeal. One property in the small township of Berrydale, for example, was purchased for $240,000, with the land sold for $260,000 and the house itself fetching $660,000.
Property experts point to the strength of local economies as a key driver behind this unexpected property boom. Paul Ryan, senior economist at PropTrack, suggested that the lifestyle changes brought on by the pandemic played a significant role in the housing market’s growth. “Despite job losses, the government’s quick and robust response helped prevent a broader economic downturn, creating an environment for economic growth and increased housing demand,” Ryan explained.
The combination of high demand, a lack of housing supply, and ongoing shifts in lifestyle preferences has contributed to the sustained growth in these regions. “It has been a highly disruptive five years for Australia’s property market,” Ryan concluded. “For those who made decisions during the pandemic that suited their needs, the tumultuous period ultimately worked out well for most.”
In conclusion, these towns prove that local economic health, government response, and lifestyle shifts are crucial to the success of property markets, even in the face of unprecedented challenges. The market in these NSW regions continues to show resilience and optimism for the future.
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