Price Growth

<html><body><p>While Victorian building approvals slowed during the pandemic, they are already starting to improve, according to m3property Victorian managing director, Luana Kenny.

Ms Kenny expects the inner city apartment market will struggle at least until international students return and borders reopen.

But also that most parts of Melbourne and regional Victorian towns are poised for further price growth, she told the Australian Property Institute and REIV State of the Market seminar.

“The owner occupier market remains incredibly robust as demand outstrips supply but as workers return to the CBD and hospitality opens up, we’ll see a rise in tenants seeking properties in the city.

“It is likely major apartment developments will remain on hold until we see how the economy recovers but as Australia is viewed as a safe place, it is expected foreign students will return which will bring life back into the CBD and city fringe precincts,’ she forecast.

Demand for units in Melbourne’s inner and middle ring suburbs has been good as a result of a strong owner occupier market, she said.

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Most parts of Melbourne and regional Victorian towns are poised for price growth, she told the Australian Property Institute and REIV State of the Market seminar.

jchancellor

Owner occupiers to drive Victorian apartment sales momentum

<html><body><p>Unit price growth was up 2.1 percent nationally over the past year with the strongest growth recorded in regional Victoria, according to the latest data from the realestate.com.au website.

The national unit median price stands at $500,000.

It is at $560,000 across the combined capitals and at $385,000 across Australia's regions.

Unit prices were up 0.6 percent national over the quarter, and up 0.1 percent during February, according to the Home Price Report.

House price growth of 0.4 percent continued in February to outpace unit growth. Over the last 12 months, national houses price growth sat at 6.9 percent, more than triple that of unit price growth of 2.1 percent.

Victoria's regions saw 11.4 percent annual growth for unit values to a $320,000 median price. It was up 2.9 percent quarterly and 0.8 percent in February.

Melbourne's unit median sat at $590,000, up 2.3 percent annually.

Hobart's unit market was the nation's second strongest in 2020, up 8.3 percent to a $400,000 median.

Sydney was the dearest capital for units at at $730,000, up just 0.1 percent over the year, the weakest rise among the capital cities.

Brisbane was the second weakest with a rise of 1.5 percent to its $395,000 median.

Darwin's median unit price was the cheapest of the capitals at $320,000, followed by Adelaide at $346,750.
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Annual unit price growth was up 2.1 percent nationally with the strong growth in regional Victoria

Annual apartment price growth up 2.1% nationally: Realestate.com.au

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<p>An overwhelming majority of respondents to Australian Property Investor’s latest Buyer Sentiment Survey say they are expecting prices to rise in 2021.</p>

<p>It's a reversal on the previous survey’s results which showed nearly half of those polled were tipping home values to fall.</p>

<p>More than 75 per cent of respondents said they were expecting house prices to rise in 2021 in the Q4 survey, as compared to just 14 per cent in Q3.</p>

<p>On the flipside, just 7 per cent of respondents said they expected values to drop in the next 12 months, down from 47 per cent in Q3.</p>

<p>“The results are in line with soaring consumer confidence,” API editor Dan Wilkie said.</p>

<p>“Buyers have been red hot in the back end of 2020," he said, adding many are clearly expecting the "momentum to continue to build next year.”</p>

<p>Queensland was the state of choice for buyers, with 31 per cent of respondents saying they had their eye on the Sunshine State.</p>

<p>Victoria was next at 26 per cent or respondents, followed by NSW at 23 per cent.</p>

<p>Just 12 per cent of respondents said they intended to buy in Perth.</p>

<p>“Brisbane, the Gold Coast and Sunshine Coast have become highlights of the Australian market as Melbourne and Sydney buyers moved north this year,” Mr Wilkie said.</p>

<p>Housing affordability emerged as the biggest concern for those surveyed, replacing tenants’ ability to pay rent due to COVID as the top worry in Q3.</p>

<p>A vast majority of respondents (53 per cent) said a detached house was their property of choice, followed by townhouse or villa at 17 per cent, while 13 per cent of respondents said they were considering buying an apartment.</p>

<p>The survey received more than 300 responses, 63 per cent of which were property investors.</p>

<p>New South Wales accounted for 32 per cent of survey responses, Victoria 29 per cent and Queensland 19 per cent.</p>
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It's a reversal on the previous survey’s results which showed nearly half of those polled were tipping home values to fall.

urban.com.au

75 percent of investors expect property prices to rise in 2021

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<p class="p1"><span class="s1">One of the great absurdities of real estate research is the notion that you can encapsulate price growth for a major city in a single figure.</span> </p>
<p class="p1"><span class="s1">The Greater Sydney area has a population of 4.82 million (2016 Census) and contains over 700 suburbs. They include markets as diverse as Macquarie Park versus Macquarie Fields and Newtown versus Campbelltown.</span></p>
<p class="p1"><span class="s1">They’re not all doing to the same thing at any one time, nor moving at the same speed.</span></p>
<p class="p1"><span class="s1">But the research houses would have us believe that you can distil all the sales activity in these contrasting places into a single growth figure that makes sense.</span></p>
<p class="p1"><span class="s1">It’s crazy to even try, but that’s what they do. And media laps it up, so long as it’s presented in a neat little media release package that makes journalists’ lives really easy.</span></p>
<p class="p1"><span class="s1">This may explain why Sydney house prices are growing at an annual rate of 7.4 percent if you believe SQM Research asking price growth index, or 4 percent if you trust the latest figures from Domain, or just 0.1 percent if you think CoreLogic is the bee’s knees in real estate data.</span></p>
<p class="p1"><span class="s1">Melbourne house prices are growing at either 8 percent, 11.3 percent or 23.6 percent in annual terms, depending on your source of choice.</span></p>
<p class="p1"><span class="s1">The Adelaide is rising, or falling; the Perth market is recovering, or not; and Canberra is up 5 percent or 18 percent – all dependent on which report you read most recently.</span></p>
<p class="p1"><span class="s1">In my view, all real estate data is rubbery figures, to some degree.</span></p>
<p class="p1"><span class="s1">And it’s adds an extra level of absurdity when economists, the least informed species about residential property on planet Earth, discuss Australian real estate as a single market. They all do it and media reports their misinformation daily – because if they have “economist” in their title they must be credible, right?</span></p>
<p class="p1"><span class="s1">The reality is that we have a five-speed market in just the eight capital cities – and within those cities they are many different scenarios playing out.</span></p>
<p class="p1"><span class="s1">We never have a situation in a major city where all parts of the market are rising (or falling) in unison.</span></p>
<p class="p1"><span class="s1">Generally speaking, cycles start in a central point and ripple outwards gradually. The up-cycles in both Melbourne and Sydney began in the so-called prime suburbs and gravitated outwards over 3-4 years.</span></p>
<p class="p1"><span class="s1">It’s a signal that the cycle has almost run its course when the areas with the most sales activity and price growth are in the outer-ring suburbs. We’re at that time right now with both our largest cities, with the Camden LGA one of the few remaining upwardly-mobile markets in Greater Sydney, and outlying areas like the Hume LGA and the Wyndham City LGA the strongest markets in Greater Melbourne.</span></p>
<p class="p1"><span class="s1">What’s happening with our major markets makes a lot more sense when you chart them using sales volumes, rather than changes in price measures.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">The latter method is fraught with potential for aberrations, with the results dependent on methodology and other factors, as the figures presented earlier illustrate very clearly.</span></p>
<p class="p1"><span class="s1">Sydney house prices are not growing at an annual rate of 4 percent, as Domain would have us believe. Some suburbs are growing more than that, others are at the point in the cycle where they’re not growing at all and some have values going a little backwards. A few areas, particularly those close to over-supplied apartment precincts, will have larger declines in values.</span></p>
<p class="p1"><span class="s1">But none of that will be conveyed to real estate consumers – they’ll be given a single misleading figure encapsulating the whole city, only to be contradicted a few days later by a different number from another source.</span></p>
<p class="p1"><span class="s1">But the sales activity figures (which we examine every quarter for The Price Predictor Index) seldom lie.</span></p>
<p class="p1"><span class="s1">They’re revealing in all sorts of ways. For example, how about this question: when did the Melbourne market peak?</span></p>
<p class="p1"><span class="s1">For in the swanky inner south-eastern suburbs such as Hawthorn (median price $2.1 million) and Canterbury ($2.9 million), it was early in 2014.</span></p>
<p class="p1"><span class="s1">For middle market areas like Blackburn ($1.3 million) and Oakleigh ($1.2 million) it was the early part of 2015. And outer-ring precincts like Cranbourne ($480,000) and Carrum Downs ($500,000) hit their high points late in 2016 or early in 2017. Other outlying areas arrived at that point towards the end of last year.</span></p>
<p class="p1"><span class="s1">It shows the many different market scenarios in play across the nation – and the degree to which economists and other commentators misinform consumers with their one-size-fits-all approach to real estate analysis.</span></p>
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terryryder-YECXbqmri2

Property price growth cycles start in a central point and ripple outwards gradually: Hotspotting's Terry Ryder

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<div>As a mainly passive investor in equities these days I must admit that I don't pay a huge amount of attention to the daily machinations of the share markets.</div>
<div> </div>
<div>That said, judging from the number of angst-ridden articles about why shares must be the way to go and definitely not property I'd say it's a fair assumption that Aussie share markets are now tanking again.</div>
<div> </div>
<div>And taking a look at the charts, yep, pretty much.</div>
<div> </div>
<div>Having briefly threatened to get back up to 6,000 after nearly eight years of trying the ASX 200 (XJO) is now deflating miserably again, all the way back down 5356.50.</div>
<div> </div>
<div>The technicals are looking rather shocking too.</div>
<div> </div>
<div><a href="/images/2015/08/17/imageChart.axd.gif" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/08/17/imageChart.axd.gif" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Property markets divergent</span></strong><br><br><span>Meanwhile, what's been happening in property markets since 2007?</span><br><br><div>The Reserve Bank of Australia (RBA) released its latest <a href="https://www.rba.gov.au/chart-pack/index" target="_blank">Chart Packs</a> during the first week of August recording the latest housing prices.</div>
<div> </div>
<div>As I expected, beyond the financial crisis the rising tide of household debt could no longer lift all boats, and so far capital growth has been strongest in the two largest capital cities, but considerably weaker elsewhere. </div>
<div> </div>
<div>Drivers of markets going forward will include jobs growth, population growth, real wages growth and foreign capital, among a number of other factors. </div>
<div> </div>
<div><span>Predictably the Sydney property market has been the clear standout, with house prices in round numbers having appreciated by <span>~</span>$400,000 (from <span>~</span>$550,000 to <span>~</span>$950,000), or more than a <span>~</span>70 per cent increase. </span></div>
<div> </div>
<div>The line denoting Sydney would look far steeper if it wasn't for the fact the RBA switched from using a linear scale to a log scale at the end of the first quarter.</div>
<div> </div>
<div><a href="/images/2015/08/17/6bl-houspri-small.gif" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/08/17/6bl-houspri-small.gif" alt=""></div>
<div>
<div>At the other end of the scale, Adelaide's median house price has appreciated by around <span>~</span>$100,000 from <span>~</span>$350,000 to <span>~</span>$450,000, or close to a <span>~</span>30 per cent increase.</div>
<div> </div>
<div>Regional house prices in aggregate showed the lowest price growth of under $100,000, the chart following a very similar trajectory to that of Adelaide. </div>
<div> </div>
<div>In Brisbane median house prices are below their 2010 peak according to <em>CoreLogic-RP Data</em>(albeit only very marginally) but are now rising. </div>
<div> </div>
<div><span>For my money, Brisbane offers the best "value" of any of the capital city markets, though investors need to be particularly careful about what they are buying, for the reasons well documented here previously. </span></div>
<div><span> </span></div>
<div><span><span>The trendline below which records investor loans on a 12mMA basis shows that Queensland investor lending in aggregate is now tracking at its highest level since April 2008 and rising.</span></span></div>
<div><span> </span></div>
<div><span>Click to enlarge</span></div>
<div><span> </span></div>
<div><span><img src="/images/2015/08/17/A2.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div><strong><span style="text-decoration: underline;">Shares and property</span></strong></div>
<div> </div>
<div>I wouldn't get too bogged down in the whole shares versus property debate, given that these are two fundamentally very different asset classes, both of which have their place in an investment portfolio. </div>
<div> </div>
<div>For average investors equities are often best viewed primarily as an income investment (just as well given that there has been no capital growth for close to a decade). </div>
<div> </div>
<div>A fundie would justly argue that through skilful stock selection they can beat the market consistently, thereby justifying their fees. </div>
<div> </div>
<div>That's fair enough.</div>
<div> </div>
<div>The same is true of property markets, really. </div>
<div> </div>
<div>Median house price growth across Australia has been fairly mixed in recent years, with Adelaide, Hobart, Perth and Brisbane recording almost no nominal price growth at all since their respective 2010 peaks.</div>
<div> </div>
<div>That said, property investors can and do aim to beat median house price growth with quality asset selection.</div>
<div> </div>
<div>I can think of at least a hundred ways in which it's possible to steal an edge on imperfect property markets, one of which is alluded to above - buying counter-cyclically. </div>
<div> </div>
<div>Another way to manufacture growth is through renovation.</div>
<div> </div>
<div>Over the long term a few other tactics might include buying property which is:</div>
<div> </div>
<div>-located within a 15 minute commute of the centre a large and growing capital city;</div>
<div>-in a land-locked suburb;</div>
<div>-within a 5 minute walk to a hard rail link or hub;</div>
<div>-comprised of a high land value; and</div>
<div>-an asset type which is in exceptionally high demand but has scarcity value.</div>
<div> </div>
<div>There are a great many others, of course. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
</div>
</div>
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pwargent-M4siyDbqQY

Steal an edge on imperfect property markets: Pete Wargent

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<p class="p1">The fondness of researchers, economists and media for generalised data is the curse of the real estate consumers trying to figure out what is really going on in the nation’s various housing markets. </p>
<p class="p3"><span class="s2">Using a single number to describe the market in a major city - or, in some cases, the entire nation – is as common as it is ludicrous.</span></p>
<p class="p3"><span class="s2">Here’s a typical statement which is worse than useless, because not only does it fail to tell anyone anything worth knowing but it creates a misleading impression: “Australian house prices rose 4.0 percent in the past year”.</span></p>
<p class="p3"><span class="s2">The first point is that this figure does not describe Australian house prices, it’s actually the capital cities that allegedly rose 4.0 percent.</span></p>
<p class="p3"><span class="s2">But the 4.0 percent figure does not accurately depict the housing market in any of the eight cities. </span></p>
<p class="p3"><span class="s2">In Hobart, according to this source, prices rose 13 percent, in Melbourne they were up 9 percent and Canberra was up 6 percent. In both Perth and Darwin, prices fell in annual terms, according to these figures.</span></p>
<p class="p3"><span class="s2">There are also myriad different scenarios happening across regional Australia.</span></p>
<p class="p3"><span class="s2">So what does the 4.0 percent mean? In reality, absolutely nothing of any value.</span></p>
<p class="p3"><span class="s2">The same approach, commonly reported by mainstream media, tells us that “Australian apartment prices” have risen 5.1 percent in the past 12 months.</span></p>
<p class="p3"><span class="s2">This is similarly meaningless. Prices fell in Brisbane, Perth and Darwin and were largely unchanged in Adelaide.<span class="Apple-converted-space">  </span>Prices rose in Melbourne and Hobart, but not by 5.1 percent – Melbourne was up 8.4 percent and Hobart rose 9.1 percent.</span></p>
<p class="p3"><span class="s2">The same source purports to provide a guide on the value of Australian homes. The median dwelling price, apparently, is about $656,000.</span></p>
<p class="p3"><span class="s2">Publication of a figure like that can set off a range of comments from multiple sources, many of them expressing outrage that young Australians can’t afford to pay $656,000 for a typical home.</span></p>
<p class="p3"><span class="s2">But, again, the figure is misleading and nonsensical. It’s the median value of a home in the combined capital cities, but six of the eight capital cities have median home values considerably lower than that figure.</span></p>
<p class="p3"><span class="s2">The generalised national figure is inflated by the size of the Sydney market, where the median home is allegedly worth $895,000, and the Melbourne market, where the median home value is claimed to be $720,000.</span></p>
<p class="p3"><span class="s2">But in Brisbane, Adelaide, Perth, Hobart and Darwin, the median home value is in the $400,000s. Adelaide, for example, is $433,000 and Hobart is $404,000.</span></p>
<p class="p3"><span class="s2">And, given that these are medians, it means that half of all recent sales have been at prices below that median figure.</span></p>
<p class="p3"><span class="s2">The single number describing Sydney does not in any way recognise the differences between Bondi and Blacktown, or Mosman and Macquarie Fields.</span></p>
<p class="p3"><span class="s2">So why is the use and abuse of these numbers so widespread? Because the goal of pontificators is not to inform, but to generate publicity – and the use of these cheap and nasty statistics makes it easy.</span></p>
<p class="p3"><span class="s2">It would require some effort to give consumers information worth having.</span></p>
<p class="p1"><span class="s1">T<em>erry Ryder is the founder of hotspotting.com.au</em></span></p>
<p class="p1"><span class="s3"><a href="https://mailto:ryder@hotspotting.com.au"><em>ryder@hotspotting.com.au</em></a></span></p>
<p class="p5"><span class="s1"><em>twitter.com/hotspotting</em></span></p>
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Single numbers can't answer for whole city property market

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<p class="p1"><span class="s1">If you can believe the headlines, Australian property values are falling. The thing is, you can’t believe the headlines. In most of our major markets, values are not falling at all.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">The problem is the way research firms and economists like to generalise about price data, with a single number describing movements in the mythical thing they call “Australian property prices”</span><span class="s2">. Like most generalised figures, this serves only to create confusion and misinformation.</span> </p>
<p class="p1"><span class="s2">According to recent headlines, national values are falling, which means the average situation with prices is a small decline. This was an annual decrease of 0.4 percent, according to one source.</span></p>
<p class="p1"><span class="s2">But, lurking behind this pointless and misleading single figure which apparently depicts our entire vast nation, are the following factors:</span></p>
<ul class="ul1">
<li class="li1"><span class="s2">Regional areas overall are rising.</span></li>
<li class="li1"><span class="s2">Five of the eight capital cities are rising.</span></li>
<li class="li1"><span class="s2">The only significant market showing annual decline is Sydney, but the size of that market is dragging down the overall average.</span></li>
</ul>
<p class="p1"><span class="s2">The truth is that Australia abounds with major cities, some capital, some regional, with growth markets. Inspired by that reality, here are my ten leading cities with growth trajectories in 2018:-</span></p>
<p class="p1"><span class="s2"><strong>Hobart</strong>: The Tasmanian capital is currently recording double-digit growth in its house prices and is likely to continue showing growth, underpinned by a vastly improved state economy. Property is selling faster there than any other capital city, vacancies are lower there than anywhere else and there’s no sign of activity slowing down.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s2"><strong>Canberra</strong>: Most research sources have Canberra values rising steadily. SQM Research’s index has Canberra up 8.5 percent. This is not surprising as the ACT economy is strong, Canberra vacancies are almost as low as Hobart’s, rents are rising and land prices are high (as a result of the ACT Government controlling land releases). All things considered, Canberra should be a national leader on price growth this year.</span></p>
<p class="p1"><span class="s1"><strong>Brisbane</strong>: Overall, Brisbane isn’t showing much growth, but values are rising. When you look behind the generalised data, there are precincts with strong price rises. I expect Brisbane growth to gradually pick up this year because the underlying economy is improving, population data is favouring South-East Queensland again and infrastructure spending is rising. The affordability comparison also favours Brisbane.</span></p>
<p class="p1"><span class="s1"><strong>Adelaide</strong>: The SA capital is similar to Brisbane. The generalised data shows only minor price growth, but individual precincts are doing much better, especially the top end. The SA economy is stronger than most realise and its steady improvement will boost the property market. I expect price growth is pick up as the year progresses. Adelaide offers great value-for-money and much better yields than the biggest cities.</span></p>
<p class="p1"><span class="s1"><strong>Perth</strong>: The WA capital is one of those cities where values overall are still down, but it depends on whose figures you believe. SQM records a 3 percent annual rise in its Asking Prices Index for Perth. My own research shows that most of the million-dollar suburbs have had double-digit growth in the past year. There’s no doubt the Perth downturn is over and we will see further evidence of growth as the year unfolds.</span></p>
<p class="p1"><span class="s1"><strong>Melbourne fringes</strong>: The single-growth figure to describe an entire large city never tells the full story. Melbourne overall has passed its peak but the outer ring suburbs are still very strong. The price growth in the past year in the northern fringes around Epping, the far south-east including Cranbourne, and the south-western regions around Werribee and Wyndham Vale, has been exceptional.</span> </p>
<p class="p1"><span class="s1"><strong>Newcastle/Hunter Region</strong>: The City of Newcastle has been one of the nation’s outstanding markets recently. Values overall have increased in double digits and many suburbs have grown their median house prices by over 20 percent. The local economy is thriving and the affordability comparison with Sydney has helped. Now the growth is rippling out to nearby areas, including the towns of the Hunter region.</span></p>
<p class="p1"><span class="s1"><strong>Geelong and nearby regions</strong>: Geelong has been the outstanding market in Victoria in the past year or so, and continues to deliver strong sales activity and price growth. It’s part of a wider trend, in which regional centres close to Melbourne are attracting spill-over population growth and demand for homes. Locations north and south of Melbourne continue to attract extraordinary sales activity and price growth.</span></p>
<p class="p1"><span class="s1"><strong>Ballarat</strong>: This strong regional city could be included the previous paragraph as a regional centre near the state capital, but it deserves its own exclusive mention. More and more Melbourne buyers are targeting Ballarat because it’s well-connected to the big city and offers attractive affordability and a different kind of lifestyle. This is now a very busy market and I expect prices to show solid rises this year.</span></p>
<p class="p1"><span class="s1"><strong>Sunshine Coast</strong>: I know many who followed our advice and bought into the Sunshine Coast market 12-18 months ago: they’re happy punters. The region’s economy is transitioning to a place of greater diversity and strength – and this is driving real estate demand. It’s attracting lots of new residents. This process is still in its infancy and there’s plenty more growth to come. Noosa, which has under-achieved for 10 years, has joined the growth party.</span></p>
<p class="p3"><span class="s2">T<em>erry Ryder is the founder of hotspotting.com.au</em></span></p>
<p class="p3"><span class="s4"><a href="https://mailto:ryder@hotspotting.com.au"><em>ryder@hotspotting.com.au</em></a></span></p>
<p class="p4"><span class="s2"><em>twitter.com/hotspotting</em></span></p>
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Australia's top 10 real estate growth cities in 2018: Hotspotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<p>Australia has many growth markets at the moment. Jurisdictions where prices are growing outnumber those where they’re falling.</p>
<p>Didn’t know that? Here’s the problem.</p>
<p>Most of our major media emanates from Melbourne and Sydney. Writers there are obsessed with themselves and have little awareness of the 17 million Australians who don’t live in the two biggest cities. They tend to assume that events in Sydney describe the whole nation. If Sydney’s booming, they write about the national property boom. If Melbourne - otherwise known as Corona Country, home of the Dan-demic – is falling, the coverage suggests a national market slump.</p>
<p>That’s never true and it’s certainly not true right now. Regional Australia is pumping and we’re not hearing too much about it.</p>
<p>Let’s look at the latest price data from Domain, which focuses on the figures for the June Quarter.</p>
<p>In annual terms, six of the eight capital cities have house prices higher than a year ago. Remarkable, really. The exceptions are Perth and Darwin.</p>
<p>In the June Quarter, Canberra and Hobart recorded increases while Adelaide was essentially no change. Sydney, Brisbane, Perth and Darwin all fell about 2% and Melbourne around 3%. Those figures generated nationwide headlines that prices were falling everywhere.</p>
<p>It’s important to note that other sources, like SQM Research and CoreLogic, have different results. Media never acknowledges that the various sources come up with different outcomes on prices – they’re too busy sensationalizing the negatives in any set of figures.</p>
<p>But CoreLogic’s latest figures record growth in house prices in the June Quarter in Adelaide, Hobart, Canberra and Darwin and no change in Brisbane. In other words, CoreLogic’s figures are more positive than those from Domain.</p>
<p>Returning to the Domain data, the results for regional Australia are considerably more bullish than those for capital city Australia. For the June Quarter it records price rises in New South Wales, Victoria, South Australia and Tasmania – while in annual terms, there are increases in Tasmania (12%), Victoria (7%), NSW (6%), South Australia (4%), the Northern Territory (4%) and Western Australia (2%). Queensland was the only regional jurisdiction to record an annual decrease (less than 1%).</p>
<p>The CoreLogic figures for regional Australia in the June Quarter recorded house price rises in NSW, Victoria, South Australia, Tasmania and the Northern Territory.</p>
<p>Markets in many regional areas are pumping. Regional cities and towns have generally experienced few cases of Covid-19 – and some have had zero cases. Apart from those heavily reliant on international tourism, local economies are travelling pretty well and some are thriving, because of the components of the local employment sector. Agriculture, viticulture, mining, medical services and food services are all sectors that have done fairly well or very well amid the virus shemozzle.</p>
<p>There is also the trend I call “the exodus to affordable lifestyle”. This was already well under way, with people relocating from the big cities to sea change and hill change locations within 1-2 hours of the capital. The virus shutdown phase has enhanced this significant trend. Working remotely doesn’t suit everyone but there are many for whom it works to work at home.</p>
<p>First-home buyers boosted by multiple government incentives and investors seeking affordability and yield, as well as solid growth prospects, are also helping to drive regional markets.</p>
<p>Near Melbourne, markets like the LGAs of Baw Baw (10%), Golden Plains (16%) and Central Goldfields (11%) have all recorded double-digit annual rises, according to the Domain data.</p>
<p>Near Hobart, municipalities such as Brighton and Huon Valley have risen 20% in 12 months, but growth markets can be found right across regional Tasmania.</p>
<p>In Queensland, the regional markets with prolific one-year increases tend to be resources-related locations, some of them rising from a low base after years of decline.</p>
<p>There’s plenty of growth happening out there in Australia, beyond the boundaries of Melbourne and Sydney.</p>
<p>Terry Ryder is the founder of hotspotting.com.au <br>ryder@hotspotting.com.au<br>twitter.com/hotspotting</p>
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Property growth markets are the majority despite claims otherwise: Hotspotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<p class="p1"><span class="s1">Australia abounds with locations where buyer activity is rising and there is strong potential for prices to rise, notwithstanding the general impression created by national media.</span></p>
<p class="p1"><span class="s1">The latest edition of the Price Predictor Index by Hotspotting has identified good quantities of growth markets within our smaller capital cities and, in particular, within the many solid regional markets that exist, especially on the eastern side of the nation.</span></p>
<p class="p1"><span class="s1">The very solid Adelaide market has large numbers of locations with rising demand, as does the recovering Perth market and the always-steady Canberra market.</span></p>
<p class="p1"><span class="s1">Regional New South Wales, as I noted in an earlier column, has strong growth markets right across the state. In some, prices have already risen strongly in the past 6-12 months, while others have the potential for growth based on the current demand trends.</span></p>
<p class="p1"><span class="s1">Regional Victoria has delivered the strongest price growth anywhere in Australia in the past year, in terms of locations where median prices have increased more than 20 percent. Other markets are now emerging, based on the sales trends, with the potential to deliver big growth.</span></p>
<p class="p1"><span class="s1">Regional Tasmania has numerous growth markets, led by Launceston, and collectively has provided some of the nation’s strongest price growth recently, based on CoreLogic figures.</span></p>
<p class="p1"><span class="s1">Regional Queensland is also sparking to life, led by double-digit growth in many of the suburbs of the Sunshine Coast and by recovering Central Queensland markets such as Mackay.</span></p>
<p class="p1"><span class="s1">I regard The Price Predictor Index as an important report because it scrutinizes one of the key parts of the property price equation – demand - by charting the number of sales occurring in every suburb and town in Australia.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">The surveys are conducted every three months to identify patterns of demand – whether demand is rising in key markets, or whether demand is falling – or, as is the case in many locations, whether there’s a pattern of consistent and steady demand, quarter by quarter, over time.</span></p>
<p class="p1"><span class="s1">The basic premise of this methodology is that prices respond to demand patterns – if demand is rising over time, prices will rise (all other things being equal).<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">If demand is falling, price growth will slow down, and may eventually stop, and – in some instances – prices will fall.</span></p>
<p class="p1"><span class="s1">The key factor here is that there’s a time lag. Prices don’t react instantaneously to changes in demand. It takes time for the changing demand patterns, whether up or down, to work through into property markets and create reactions in prices.</span></p>
<p class="p1"><span class="s1">Demand in the Sydney was steadily falling away in 2016 but it wasn’t until 2017 that we saw the first clear signs of a slow-down in price growth, looking across all the data from multiple research sources.</span></p>
<p class="p1"><span class="s1">And then in 2018, as the slow-down in demand continued, we saw prices falling in some parts of the Sydney market, although in most cases the decreases have been quite moderate.</span></p>
<p class="p1"><span class="s1">Right now, prices are rising strongly in other Australian markets, including in Hobart; in the million-dollar suburbs of Canberra, Adelaide and Perth; and in numerous locations in regional Australia. In each case, these price rises were preceded by increases in sales volumes – in other words, increases in demand.</span></p>
<p class="p3"><span class="s1">T<em>erry Ryder is the founder of hotspotting.com.au</em></span></p>
<p class="p3"><span class="s2"><a href="https://mailto:ryder@hotspotting.com.au"><em>ryder@hotspotting.com.au</em></a></span></p>
<p class="p4"><span class="s1"><em>twitter.com/hotspotting</em></span></p>
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Demand in smaller capitals and solid regional markets will lead to property price growth: Hotspotting's Terry Ryder

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<p class="p1"><span class="s1">Real estate abounds with myths and misconceptions, most of them contradicted by the research evidence.</span></p>
<p class="p1"><span class="s1">Perhaps the oldest and most enduring of property’s cliches is that you get the best capital growth in the prime inner-city suburbs.</span></p>
<p class="p1"><span class="s1">That old furphy is usually stated as a self-evident truth without supporting evidence, or with a few cherry-picked examples that appear to back the theory.</span></p>
<p class="p1"><span class="s1">The truth is, superior long-term growth can be found in all manner of places. The key elements driving growth seldom relate to proximity to an icon, like the Sydney CBD.</span></p>
<p class="p1"><span class="s1">You’re just as likely to find outstanding growth rates in middle-ring suburbs, the affordable outer-ring areas and in selected regional centres, while some iconic locations have poor growth rates (Surfers Paradise being a standout example).</span></p>
<p class="p1"><span class="s1">Cheaper areas often shine because they attract the great mass of buyer demand, thanks to their affordability.</span></p>
<p class="p1"><span class="s1">Following four years of strong price growth in Sydney, most suburbs have attractive long-term growth rates (average annual growth in median prices over 10 years), despite Sydney’s below-par performance between 2003 and 2013.</span></p>
<p class="p1"><span class="s1">Many now have long-term capital growth averages above 10 percent a year. And the top performers are widely spread across the Sydney metropolitan area.</span></p>
<p class="p1"><span class="s1">Inner-city Burwood (median price $2 million) has the same long-term growth rate (10.4 percent per year) as Busby ($640,000), which is out west near Liverpool.</span></p>
<p class="p1"><span class="s1">Balmain ($2.17 million) and Canley Vale ($820,000) both have growth rates around 10 percent per year.</span></p>
<p class="p1"><span class="s1">Emerton, out west near Blacktown with a median price of $540,000, has a slightly better capital growth rate (10.5 percent) than Eastwood, with a median of $1.87 million (10.2 percent).</span></p>
<p class="p1"><span class="s1">Seriously upmarket Mosman (median $3.87 million), has a modest growth average of 6.2 percent, whereas Lethbridge Park (median $520,000) has averaged 10.2 percent, despite its downmarket image and location (part of the City of Blacktown).</span></p>
<p class="p1"><span class="s1">St Marys ($660,000), near Penrith, and nearby Tregear ($505,000), have growth rates above 10 percent per year, on a par with Rose Bay ($4.1 million) and considerably better than Gordon ($2.5 million), where growth has averaged 7.6 percent per year.</span></p>
<p class="p1"><span class="s1">Islington ($670,000), a suburb of Newcastle, is equal to Hurstville ($1.6 million) in Sydney’s south.</span></p>
<p class="p1"><span class="s1">Having some kind of stigma is no barrier to good capital growth.</span></p>
<p class="p1"><span class="s1">So it doesn’t surprise me to see new research which refutes one of the most cherished beliefs in real estate – that areas with high crime rates have inferior capital growth.</span></p>
<p class="p2"><span class="s1">The report shows that affordable areas attract strong demand, generating above-average price growth, regardless of the local crime statistics. This is particularly so if a cheaper area is undergoing gentrification.</span></p>
<p class="p2"><span class="s1">According to RiskWise Property Research, housing in high-crime areas across Australia is outperforming the general property market. This correlates with Hotspotting analysis which shows that low-priced locations, including those stigmatised as “problem” areas, often have strong capital growth.</span></p>
<p class="p2"><span class="s1">“The research house discovered high-crime areas, despite expectations, are trumping their safer neighbouring suburbs when comparing their five-year growth to the city’s median,” says RiskWise CEO Doron Peleg.</span></p>
<p class="p2"><span class="s1">He says investors commonly attribute too much weight to crime figures and should more objectively analyse the financial risks when making property investment decisions. </span></p>
<p class="p2"><span class="s1">“Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark. </span></p>
<p class="p2"><span class="s1">“We found affordable high-crime areas with significant gentrification are likely to produce strong price growth, particularly when dwelling prices in the inner and middle rings are unaffordable.” </span></p>
<p class="p2"><span class="s1">In Melbourne, some suburbs significantly outperformed the market. Frankston North, a notable downmarket suburb in the far south-east, delivered growth of 102% over the past five years. </span></p>
<p class="p2"><span class="s1">“Our research shows that suburbs like Frankston North are not outliers and similar results can be found in each of the major cities,” Peleg says. </span></p>
<p class="p2"><span class="s1">“Busby in the western suburbs of Sydney is another example. This suburb consistently endured some of the highest gun violence rates across the city, yet it delivered growth above the median for Greater Sydney.” </span></p>
<p class="p2"><span class="s1">In Sydney, eight of the Top 10 high-crime areas outperformed the market due to very strong demand from owner-occupiers and investors for affordable properties. </span></p>
<p class="p2"><span class="s1">“Together, these high-crime Sydney suburbs delivered outstanding five-year growth of 87% for houses and 65% for units, outperforming the Sydney price growth benchmark,” he says. </span></p>
<p class="p2"><span class="s1">“Brisbane and Gold Coast high-crime areas also typically outperformed the market.” </span></p>
<p class="p2"><span class="s1">While price growth in Adelaide and Perth was below the local benchmark, high-crime areas undergoing significant gentrification delivered strong growth. For example, Prospect in Adelaide outperformed the local housing market with 26% median price increase over the past five years. </span></p>
<p class="p1"><span class="s1">T<em>erry Ryder is the founder of hotspotting.com.au</em></span></p>
<p class="p3"><span class="s2"><a href="https://mailto:ryder@hotspotting.com.au"><em>ryder@hotspotting.com.au</em></a></span></p>
<p class="p4"><span class="s1"><em>twitter.com/hotspotting</em></span></p>
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