- Some Sydney apartments prove attractive as prices half that of houses
- Perth and regional Queensland continue to top the leaderboard
- Sluggish Brisbane areas may see activity pick up following significant investment
Australia’s housing market is being tipped for recovery over the next few months, with the latest data from across the industry pointing towards upward price movement.
In early April, the house price indices of PropTrack and CoreLogic both showed signs of growth, with small upticks in prices recorded across the nation. The latest data from both companies again showed rises in their respective house price indices.
The theme of recovery was also identified by Hotspotting, recently releasing its latest Top 10 National Best Buys report for the next six months.
Hotspotting Founder and Managing Director, Terry Ryder, said a number of factors are influencing markets around the nation with both big cities and smaller regional locations recording positive market metrics.
“Improving data on prices in the biggest cities recently has added to the ongoing strong performance in smaller cities and regional areas, the worsening shortage of rental properties, the significant increases in rents and more optimistic consumer sentiment,” Ryder said.
“It adds up to a scenario where prices will likely rise in most of the nation’s key markets in 2023 – which was our forecast before the year started.
“Even the big bank economists have turned more positive in their outlooks, although they continue to under-estimate the underlying strength in real estate markets in our assessment.”
There are some positive signs ahead. Although the April rate pause was followed by a 25 basis point rise this month, some banks and lenders have started to cut their own borrowing rates. The fundamentals for parts of Australia’s real estate market remain especially strong and the rate of construction is starting to pick up, albeit not at the necessary levels to meet demand.
Hotspotting’s report noted several factors are influencing the real estate market at present, with many of those mentions reflected in other expert observations.
Among the key influencers of the real estate market:
- A continued severe shortage of supply, relative to demand, for both the buyers and renters,
- Price growth off the back of the shortages,
- Additional demand from the return of ex-pats, overseas migrants, and international students,
- Increased migrant intake by the Federal Government,
- Continued low levels of unemployment, and
- The expectation that interest rates will stay put this year.
While Perth remains a stand-out performer, according to Ryder, regional Queensland is also whetting buyers’ appetites as the market offers “… the best combination of affordability, good yields, and growth prospects.”
One market that is ‘back in business’ is Sydney’s inner city apartment market, according to Hotspotting General Manager Tim Graham.
“People are buying apartments in inner-city areas where units are less than half the price of houses such as in Inner West of Sydney and Brisbane’s inner south Olympic Precinct,” Graham said.
“Our analysis also shows that Sydney is heading into recovery and the Melbourne and Victoria markets are expected to strengthen as the year unfolds.”
Top 10 National Best Buys
According to Hotspotting’s latest report, the top 10 buys (local government areas) for May to September 2023 are:
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- Stirling, WA
- Toowoomba, QLD
- Inner West, NSW
- Townsville, QLD
- Hume, VIC
- Salisbury, SA
- Ballarat, VIC
- Olympic Precinct, QLD
- Canning, WA
- Greater Geraldton, WA
Stirling, WA
The City of Stirling was previously picked as Hotspotting’s National Growth Star, picked for its superb amenity.
Ryder noted in the latest report that the local government area (LGA) shows promise due to significant activity within Stirling.
“The LGA is rising thanks to several large infrastructure projects, some of which have been completed recently,” he said.
“The Stirling City Centre project, touted as being one of Australia’s biggest urban regeneration projects, finished in January 2021 – while $1.6 billion is being spent on upgrading two of the LGA’s major shopping centres.”
Over a billion in projects are either recently completed or under way, the report citing the Scarbrough Beach redevelopment, Karrinyup Shopping Centre expansion, and transport projects.
Toowoomba, QLD
The inland city is some one and a half hours west of Brisbane, and has a $12 billion economy, according to the report.
A strong and diverse economy are some of the factors playing in favour of Toowoomba, with Graham noting several major upcoming projects, including the Toowoomba Second Range Crossing, are set to ‘cement’ the city’s reputation as an intermodal transport hub.
“This will be further enhanced by the $15 billion Inland Rail Link, for which Toowoomba is a major pivot point,” Graham said.
“Other growth catalysts include the city’s proximity to Surat Basin’s resources as well as the region’s more traditional agricultural, tourism and manufacturing bases.”
Asking prices for Toowoomba
Inner West, NSW
Inner western Sydney is set to benefit from major train station upgrades and other multi-billion dollar projects such as the Rozelle Interchange.
Ryder hailed the Inner West as one of Sydney’s ‘most resilient sectors’, noting in particular the relative affordability of apartments.
Asking prices for Sydney’s Inner West
According to SQM Research data, units are less than half the price of a house, coming it at around $750,000.
Townsville, QLD
Another Queensland city is touted for its economy, which includes military, government admin, tourism, education, export, manufacturing, and resources, according to the report.
Graham noted the city is set to also see billions of dollars in investment, with unemployment also trending sharply downwards.
Hume, VIC
The City of Hume is some 40 minutes out of the Melbourne CBD, and according to Ryder, is home to the fourth-largest population in the State.
“Hume continues to remain an affordable option in 2023 and can expect further benefits from government spending and improved infrastructure in coming years,” said Ryder.
Salisbury, SA
The City of Salisbury may be turning into an aerospace hub, with the $1.9 billion Edinburgh Parks Industrial Precinct currently under construction adjacent to the Edinburgh Defence Precinct.
“The emerging 300-hectare precinct is attracting industries including aerospace and space technologies, cyber-security and defence, food and beverage manufacturing, logistics support and automotive industries.”
Ballarat, VIC
The locale is yet another pick that has shown significant resilience in the face of cooling markets. Ryder noted the locale saw median price growth above 20% over the past 12 months.
Asking prices for 3350
Olympic Precinct, QLD
With the major sporting event to take off in 2032, it almost comes as no surprise that there are billions of dollars being injected into the local economy.
Graham said that while the Inner South Precinct of Brisbane has performed sluggishly in the past, it is well positioned for growth.
Canning, WA
The LGA enjoys excellent access to several large-scale employment nodes in Perth, said Ryder.
Suburbs within the City of Canning are also affordable, with Ryder noting the LGA is a “community for young families.”
Greater Geraldton, WA
The key regional centre has seen significant growth in recent years, according to Graham, with growth running parallel to Perth:
“Geraldton is a key regional centre that has grown swiftly in recent years, in line with growth in Perth and the State overall,” said Graham.
“As the Perth property market rebounded strongly in 2020 and delivered notable growth in 2021 and 2022, so too did the municipality of Geraldton, four hours north of the capital city.”
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