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Australia's property hotspots for 2020: Experts pinpoint the locations to watch
- Roi Advisory
- Jan 9, 2020
- 3 min read
Australians last year saw record-low interest rates and dramatic price recoveries in Sydney and Melbourne, a federal election and a banking Royal Commission that sent waves through the property market. Attention now turns to where the property hotspots of the new year will emerge. Hobart is the strongest contender of the capitals, according to Propertyology managing director Simon Pressley.
He said the city had been a solid performer over the past five years, had a strong GDP, and is now experiencing a new surge of activity. Work opportunities and affordable house prices – particularly compared with Sydney and Melbourne – would drive more buyers from the Australian mainland to the southern city, he predicted. “Housing is still incredibly tight,” Mr Pressley added. He suggested there was even more promise outside of the capitals, with another Tasmanian city tipped to shine.“The best of the bunch is Launceston, which has been performing well for about 18 months and is definitely benefiting from the strong Tasmanian economy,” he said. Aside from a blossoming hospitality sector, Mr Pressley said, the construction of a new university campus in Launceston would improve job opportunities and boost local confidence in the market. He said this was likely to draw more investors to the area in years to come, once the campus was completed.
At the other end of the country, Mr Pressley said Queensland’s top performers were likely to be outside Brisbane, pointing to Cairns and Mackay as examples. He said a jobs boom was unfolding in Cairns, bolstered by new luxury hotels, an expanding university campus, and tourism. “Vacancy rates are very low … and rents are already rising, which is a sign that there’s pressure on housing supply,” Mr Pressley added.
Domain economist Trent Wiltshire said savvy buyers should also be eyeing the south-east Queensland market in the new year. “[It] has held pretty steady over the past couple of years but prices are now on the rise,” Mr Wiltshire said. “Construction has slowed, and population growth is also very strong, which should push up prices.” He said Sydney’s price recovery had highlighted the value for money offered on the Gold Coast, as well as in Brisbane.
In Victoria, Mr Pressley said the top spots would be in regional areas like Mildura and Bendigo. Bendigo was benefiting from an influx of buyers being priced out of Melbourne, he said, who found they could still commute to the CBD by train in about two hours. “We will see a lot of that, not only next year but in the years to come,” he said.
Mr Pressley urged buyers to be wary of letting FOMO (fear of missing out) drive their purchasing decisions, as prices continue to rise in Melbourne and Sydney. “Those markets are rebounding strongly from the RBA cuts … but when the stimulus stops, and interest rates don’t keep going down and down, you’re left with the fundamentals,” he said. “You have to think: ‘what was happening before the stimulus started?’ Both cities were in downturns.”
But property hotspots could still emerge in Sydney next year. South-eastern suburbs near Kingsford and Botany are likely standouts, particularly for investors, according to NewFandangled Properties principal Lesley Gregg. The Kingsford branch of the new CBD and South East Light Rail is due to open in early 2020, which Ms Gregg said would make the area more desirable for commuters. “This is massively going to change decisions about where people would like to live,” she said. “Previously those areas haven’t had access to trains with the closest stations at Bondi Junction or Green Square.” She expected a similar pattern to play out in Brisbane’s Woolloongabba, where a new rail link will take commuters to the CBD in minutes.
Kingsford is already attracting more attention from buyers seeking a cheaper alternative to Randwick, according to Belle Property Bondi Junction agent Edward Brown. He said buyer demand was picking up as more people recognised the suburb’s proximity to parks, the University of New South Wales and Randwick Hospital. Mr Brown expected the light rail to start influencing buyer behaviour. “The light rail definitely comes up in conversation but … we haven’t seen the benefits yet because it hasn’t come into play,” he said.
Although Perth was not topping any lists of economic powerhouses, buyers would do well to watch market trends. Mr Wiltshire predicted that Perth would see modest price growth in 2020, with the market close to bottoming out after five years of decline. “The WA economy is rebounding, driven by a resurgent mining sector,” he said.
Source: Domain, Published on January 4, 2020
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