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How 2020 impacted Australian property prices

A new analysis has revealed that prices in the majority of Australian suburbs actually grew in 2020, despite prolonged lockdowns in some parts of the country.

How 2020 impacted Australian property prices

15 March 2021

When the global coronavirus pandemic hit Australia in mid-March 2020, the outlook for the property market was dire. But despite initial fears that the housing market could drop by as much as 30% during the health crisis, property prices in Australia showed resilience over 2020

A new analysis has revealed that prices in the majority of Australian suburbs actually grew in 2020, despite prolonged lockdowns in some parts of the country.

Property prices grew in most Australian suburbs in 2020. Picture: Getty

Director of Economic Research at, Cameron Kusher, said there were several reasons why property prices didn’t fall dramatically in 2020, namely the large amount of stimulus that was pumped into the economy amid the COVID-induced recession.

“The recession was unlike others because of the unprecedented level of support from the Federal Government for businesses and households,” Mr Kusher said. 

“HomeBuilder has stimulated new housing, JobKeeper has kept many Australians employed and the relaxation of bankruptcy laws, along with lenders offering mortgage holidays, ensured we didn’t see a rise in forced sales.  At a time when people are spending less, historic low borrowing costs,  have seen more demand flow into the housing market, driving up sales and supporting price levels.”

The “COVID-19 effect” stimulated growth in lifestyle suburbs

Lifestyle suburbs were among those to see the biggest price growth in 2020, suggesting a shift away from city living during the pandemic.

Popular inner-city suburbs, more expensive outer coastal markets and lower-priced lifestyle markets ranked particularly high in the top 10 suburbs, with the biggest growth both nationally and state-by-state. 

Beachside suburbs on the NSW Central Coast ranked high in the price growth charts. Picture: Getty

“The price data supports the fact that there has been a rise in demand for lifestyle properties, which has pushed up property prices in those areas,” Mr Kusher said. 

“The trend across the country has been strong demand for coastal properties, particularly those in outer areas of capital cities and adjacent to capital cities.

“With people realising they can work from home effectively and, in many cases, will not have to return to the office five days a week, this opens up the opportunity for them to live further away from the office in a

 location they want, while still having the ability to commute to the office when required.”


The peninsula suburb of Pearl Beach, on the Central Coast of New South Wales, saw the biggest growth in house prices nationally with an increase of 46%, bringing the suburb median to $1,470,000. It was closely followed by North Avoca, also on the NSW Central Coast, with 44% growth to a median of $1,377,500.

Stuart Gan, Director of Central Coast Realty in Umina Beach, said there is “feverish” demand for homes in Pearl Beach due to what he calls the “COVID-19 effect”.

“While there were always two strings of buyers, the local buyers and the Sydney buyers, there’s now also a third group of buyers;  the non-local buyers, who have been motivated by COVID-19,” Mr Gan said.

“They had intended to move to Pearl Beach at some stage but COVID-19 has rattled their cage and showed them how strange the world can be. They’re thinking: ‘Let’s get out and enjoy our property now and not put our plans on hold any longer’.

“We’re probably getting 10 years’ worth of buyers [in Pearl Beach] in one year because of COVID.”

The family home at 2 Jade Place, Pearl Beach received a lot of interest from both local and Sydney buyers. Picture:

Mr Gan recently sold a four-bedroom home at 2 Jade Place, Pearl Beach to a Sydney family for $1,515,000.

“Prior to Christmas, we had plenty of interest in the property from local and traditional Pearl Beach buyers, but over the holidays we had a lot of interest from Sydney people wanting to decentralise and get out of town. We ended up selling to a family who intend on living there, ultimately,” Mr Gan said.

Holiday hotspot Portsea (median $2,515,000), on Melbourne’s Mornington Peninsula, showed the strongest house price growth in Melbourne at 34%, while St Lucia ($1,500,000) had the biggest growth in Brisbane at 35%.

The CBD fringe suburb of East Melbourne ($872,000) and Waverley ($1,150,000), in Sydney’s eastern suburbs, experienced the biggest growth in unit prices in the country, both with increases of 45%.

The inner-city suburb of New Farm ($665,000) had the biggest jump in unit prices in Brisbane at 15%.

The analysis compared the median sales prices from January to December 2020 with the same period in 2019 to calculate the year-on-year change (%). Only suburbs with at least 30 sales in each respective year were included. The examples in this article include greater city suburbs only.

Investor markets took a hit

The closure of Australia’s borders during the health crisis has led to a major reduction in international arrivals, particularly overseas students who make up a large cohort of city renters. A subsequent oversupply of vacant rental units in major CBDs like Sydney and Melbourne has led to price falls in these areas, said Mr Kusher.

“Rental demand has dried up in these markets and investor purchasing has fallen away. People who own investment properties, and have chosen to sell, have found it difficult to find a buyer and in order to find one, have generally had to reduce the price so they can sell,” he said. 

Investors are backing away from purpose-built student accommodation in Melbourne’s Carlton.   Picture:

The university suburb of Carlton, in Melbourne’s inner north, saw a 13.3% drop in unit prices in 2020, taking the median to $340,000. Carlton showed the second biggest decrease in unit prices in Melbourne after the bayside suburb of Sandringham ($670,000), which had a 13.9% drop. 


Glenn Bartlett , a partner at Woodards Carlton, said Carlton buyers are shying away from investor-grade apartment stock that is purpose built for students.

“The students that usually drive the local Carlton market are obviously not here in the numbers that they were. So, there’s been a flow-on effect on rent and consequently on sale prices,” Mr Bartlett said.

“We’re certainly seeing the market driven more by owner-occupiers than investors at the moment, particularly with first-time buyers and those apartments that appeal to an owner-occupier rather than investors.”

Mr Bartlett said he is yet to see a lot of investors in distress and needing to sell, but that could change when government stimulus starts to peter out in the coming months.

“It wouldn’t be a surprise. People can only afford to keep servicing apartments that aren’t bringing in rent for so long, particularly as employment situations are tenuous or in a state of flux. We’ll have to watch that space”.

The Sydney harbourside suburb of McMahons Point ($1,110,000) saw the biggest drop in unit prices in the city at 20.7%, while Brisbane’s Ashgrove ($430,000) had the biggest unit price drop in the Sunshine State’s capital with a 12.2% decline.

The inner-Perth suburb of Burswood had the biggest unit price decline in the country in 2020. Picture:

Looking nationally, the inner-Perth suburb of Burswood ($562,500) experienced the biggest unit price decline, with a drop of 24.7%.

House prices in Melbourne’s blue-chip Armadale ($1,801,800) saw the biggest drop nationally at 27.5%. The affluent suburbs of Unley ($903,000), in inner Adelaide, and Wembley Downs ($933,000), in inner Perth had the second and third largest declines at 24.3% and 18.9% respectively.

Mr Kusher said it is not surprising to see price falls in premium suburbs year-to-year.

“On a suburb-by-suburb basis you will always see instances where prices have fallen in one suburb and then risen substantially in the suburb right next door,” he said.

“Remember that price changes are measured by a pool of properties sold one year versus a pool sold the next year, so if the pools are dramatically different in terms of the property quality and location, the growth rates can be exacerbated in either direction.

“Given this, it isn’t a surprise to see some premium suburbs fall in price, but it is probably due to compositional changes rather than true price changes.”

Melbourne’s blue-chip Armadale saw the biggest decline in house prices in the country in 2020.  Picture:

Burwood ($1,600,000), in Sydney’s Inner West, had the biggest drop in house prices in that city at 14.4%, while Paddington ($1,080,000) showed the biggest decrease in Brisbane at 10%.

The most expensive and most affordable suburbs in 2020

Unsurprisingly, inner-Sydney suburbs dominated the top 10 most expensive suburbs to buy a house and a unit in Australia in 2020.

The eastern suburb of Bellevue Hill remained at number one for houses with a median of $5,800,000, compared to $5,700,000 in 2019, while clifftop Vaucluse ($5,400,000) kept its number two ranking. Woollahra ($3,700,000) came in at number six, escalating from 16th spot and a median house price of $2,750,000 in 2019, while Rose Bay ($3,590,000) ranked at number 10, dropping from fourth spot and a median of $4,025,000 the previous year.

It’s worth noting that Australia’s most expensive suburb, Sydney’s Point Piper, rarely has enough sales to derive a median price so it is often left off these lists.

Exclusive Toorak ($4,200,000) remained the most expensive suburb to buy a house in Melbourne and New Farm ($1,712,500) was number one in Brisbane, jumping from second place and a median of $1,480,000 in 2019.

The most expensive suburb in the country to buy a unit was Darling Point ($1,800,000), jumping from second spot and a median of $1,871,500 in 2019, followed by Manly ($1,475,000).

The priciest suburb to buy a unit in Melbourne was Balwyn North ($1,079,500) and in Brisbane it was New Farm ($665,000).


Originally published on under “How 2020 impacted Australian property prices


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