5 powerhouse cities with the strongest property markets

InvestorKit founder and head of research, Arjun Paliwal, explained that among supply strains, the narrative has already begun to change and “we are beginning to see easing pressure across key markets”.

Paliwal stated that while the conditions in each capital city’s economy were nuanced in their individual differences, investors and buyers who base their decisions upon underlying data could best seize a solid opportunity.

“Astute buyers and investors can now find properties with strong growth potential, at an attractive price, in our nation’s economic powerhouses.”

The five economic powerhouse cities with strong property markets in Australia are:

1. Greater Sydney

With Sydney contributing almost two-thirds of NSW’s economic output and ranking second across Australia, InvestorKit stated that Sydney’s economy has been boosted by billions worth of infrastructure projects, being propped up by the Western Sydney Airport, Western Harbour Tunnel, hospital upgrades and metro developments.

Despite Sydney’s booming economy, InvestorKit cautioned that Sydney housing growth is expected to slow in 2024 due to a gradual decline in demand, a stable supply and ongoing affordability issues that have resulted in increased inventory.

2. Greater Melbourne and Geelong

Victoria’s economy has continued to strengthen. With the state ranking equal with NSW for economic performance, Greater Melbourne and the Geelong region currently contribute four-fifths of the state’s growth.

InvestorKit reported that Greater Melbourne has seen surging net overseas migration, while Geelong has become the second-largest internal migration receiver among all regional cities. Even so, within these regions, the local housing market is seeing lower demand and higher supply.

InvestorKit, however, stressed Melbourne and Geelong’s fast-increasing population, active job market, relative affordability and multiple large-scale transport infrastructure projects as positioning the Greater Melbourne market to grow exponentially in the coming years.

3. Greater Brisbane, Gold Coast and Sunshine Coast

InvestorKit relayed that the Southeast Queensland trio has significantly benefited from internal migration, with Greater Brisbane being one of two cities (the other being Perth) seeing an influx of residents from other parts of Australia while the Sunshine Coast and Gold Coast have registered as top recipients of internal migrants among regional cities.

Despite declining demand, strained supply and reduced inventory, the area’s booming population and heavy infrastructure mean InvestorKit expects healthy economic growth in the coming year.

4. Greater Adelaide

South Australia, for the first time, took the top place in CommSec’s economic leader board recently, boasting economic output 9 per cent above its four-year average and unemployment 36.5 per cent lower than its decade average.

InvestorKit emphasised Adelaide’s vibrant economy, active job market and balanced affordability and liveability as being particularly appealing for migrants and one reason net internal migration losses are shrinking every year.

InvestorKit expects a successful 2024 for the city after its housing market was considered one of Australia’s most active and best performers for 2023, with high market pressure set to continue.

5. Greater Perth

Western Australia and Greater Perth’s economy is experiencing a strong comeback that InvestorKit attributes to both rising commodity prices and the booming job market resulting in surging internal and overseas migration.

Notably, Perth’s property market was the top capital city performer in 2023. Looking ahead, InvestorKit cited the continuing high market pressure as solidifying Perth’s 2024 prospects as a result of its low and decreasing inventory, dropping sale days on market and extraordinarily low vacancy rates.