Real estate outlook

HOW WILL AUSTRALIA’S RESIDENTIAL MARKETS SHAPE UP, AND WHAT ARE THE BEST SUBURBS AND REGIONAL CENTRES FOR INVESTORS?

The past year has shown us once again that the Australian residential property market is made up of many small markets. Some capital city property markets have performed much better than others. Let’s take a closer look.

If we check the Bureau of Statistics data it shows that in Perth and Darwin property prices have dropped in the past 12 months. In fact, these capital cities have similar house prices to what they were seven years ago!

The good news is that every other capital city has shown an increase. The news is even better if we go back seven years to 2010. During this time period, Sydney and Melbourne have been the standout performers with house price increases of 75% and 48% respectively.

Two of our smallest capital cities have performed relatively well – Canberra house prices have increased 25% and Hobart prices are 21% higher. Brisbane saw prices increase by 16% and Adelaide’s prices increased by 15%.

2018 promises to be an interesting year. The “property party” is well and truly over in Sydney and Melbourne, with some statistics showing that Sydney prices have already fallen slightly. In Hobart, the party has only just started and we can expect to see much higher prices in 12 months. Adelaide will continue to do its thing and not attract much attention with its moderate price increases.

In my opinion, the capital city property market to watch in 2018 will be Brisbane. Due to a combination of increasing underlying demand and, most importantly, the property price differential between Sydney and Brisbane, we will see many people sell their houses and move from Sydney (and retire/ semi-retire) to Brisbane.

How do I know this? It has happened in the past and I can see it happening again.

If you are looking to buy in one of our capital cities in 2018, take a close look at these top picks:

ADELAIDE – West Hindmarsh, West Croydon, Thebarton.

BRISBANE – Herston, Kelvin Grove, Woolloongabba. CANBERRA – Braddon.

DARWIN – Millner.

HOBART – North Hobart, South Hobart, Glebe.

MELBOURNE – West Footscray, Footscray.

PERTH – East Victoria Park.

SYDNEY – Tempe, St Peters, Marrickville.

If you are looking to invest in regional areas, focus on the food bowls, in particular the areas that are exporting most of their produce to Asia.