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Southeast Queensland and commuter corridors in Victoria offer best prospects for property price growth, new report shows

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INVESTORS in search of properties that will deliver high capital growth in the years ahead may find southeast Queensland and certain fringe suburbs of Melbourne safe bets.

These regions accounted for the bulk of high growth property markets in Hotspotting.com.au’s latest Top 10 Best Buys report, which forecasts the 10 best locations for property investors seeking capital growth.

Queensland locations in the report included the Gold Coast, Ipswich and Logan, while the Melbourne regions included the City of Casey and Epping.

Just one NSW location was nominated: Wagga Wagga.

No property markets in South Australia or Western Australia made the cut, but Tasmania had a surprising addition in Hobart.

The report said these locations have “identifiable drivers of demand for real estate, which will place pressure on prices and rents … we expect them to show growth not only in 2016 but well beyond.”

GOLD COAST, QLD

Billions is being spent on infrastructure across the Gold Coast in the lead up to the Commonwealth Games in April 2018, which is expected to bring around 690,000 visitors to the city.

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Ongoing projects include the $150 million development of the light rail network and a $42 million aquatic centre.
These and other developments have helped create 15,000 jobs over the past year, adding to the city’s already strong population growth. The Gold Coast’s population is projected to grow by 133,800 people in the decade — the largest population growth in Queensland.

“There will be (property) price growth, especially in the genuine residential suburbs,” the Hotspotting report said. Much of this growth is expected to occur in suburbs along the northern corridor between Helensvale and Brisbane.

LOGAN, QLD

Logan City’s combination of affordable property prices, good infrastructure and proximity to job hubs could boost home values.

Many of the region’s older suburbs have been revitalised through urban renewal projects and Logan is already one of the fastest growing municipalities in Australia.

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It is being expanded through a $4 billion masterplanned housing community on Waterford Tamborine Road, which will result in 17,000 new dwellings.

There is also a $600 million project to redevelop Jeta Gardens Retirement Village, approved by local council in 2014. The village currently injects $10 million into the local economy annually, but this is set to rise to $100 million.

HOBART, TAS

Tasmania’s economy is rising on the back of big improvements in tourism and business investment after years of lacklustre economic activity.

The property market has started to respond, with sales activity steadily improving since 2012.

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Hotspotting pointed out that Hobart presents an attractive package to investors, with high rental returns and prices considerably more affordable than on the mainland.

The city’s most popular suburbs, which include Claremont, Glenorchy, Howrah, Kingston and Moonah, have median prices under $400,000.

EPPING, VIC

The Epping region, on the northern fringe of Melbourne, is due a number of improvements which are likely to bring new people to the suburb and boost property prices, Hotspotting said.

These include the upgrade of the Western Ring Road, further expansion of commuter train services in the region and the relocation of Melbourne’s fruit and vegetable markets to Epping. There is also a new business park in development at Mickleham, which will create 20,000 jobs.

CITY OF CASEY, VIC

The property market in the City of Casey, in Melbourne’s southeast, has been growing, with many suburbs attracting rising sales activity.

The area’s rising population demands new housing estates and the State Government’s long-term planning document — Plan Melbourne — has identified several suburbs in the Local Government Area to play a major role in service delivery and creating employment.

An upturn in commercial development activity began in 2015 with five major projects creating 3,730 new jobs. The planned Berwick Health, Innovation and Education Precinct is expected to provide an additional 9,000 new jobs.

THE REST OF THE TOP 10:

Moreton Bay, Qld: The region offers affordable housing as well as good rail and road links to Brisbane and the Sunshine Coast, making it a strategically placed property market.

Sunshine Coast, Qld: Billions of dollars in service upgrades, including the development of a $5 billion medical hub, are driving an influx of new jobs to the area, in the process, boosting demand for housing.

Sunshine precinct, Vic: Sunshine and surrounds are destined to become a major regional hub within the Melbourne metropolitan area. Extensive investment in infrastructure and amenities will drive demand for property and pull up prices.

Wagga Wagga, NSW: The high number of first-home buyers taking advantage of affordable properties in the area bodes well for Wagga Wagga’s capital growth prospects, the Hotspotting report said. Army and air force bases are expanding in the area, while education, health and other community services are being upgraded.

Ipswich, Qld: A report by the Department of Infrastructure and Transport forecast 56,000 jobs will be created in Ipswich’s central suburbs by 2026. The jobs growth, coupled with affordable prices, will fuel demand for housing, Hotspotting said.

 

Originally Published On: http://www.heraldsun.com.au/

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Opinion

Experts warn of ‘debt bomb’ as housing downturn worsens

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debt bomb
AUSTRALIA is facing a “debt crisis” — and the property market and our entire economy are at risk as a result.

That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.

According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.

If that happens, it would also cause an economic “catastrophe”.

Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.

“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.

“There’s $1.7 trillion held by the banks in mortgages for owner-occupies and investors. And that’s about 65 per cent of their total lending.

“That’s higher than any other country in the Western world by a long way.

“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”

Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.

“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.

“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”

debt bomb

Melbourne homeowner Mohammed Souid told 60 Minutes his family was experiencing mortgage stress. Picture: 60 MinutesSource:Supplied

It’s a sentiment shared by Laing and Simmons real estate agent Peter Younan, who said the median house price in his patch in Granville in Sydney’s west had dropped from $1.2 million to $1 million in just one year — a shocking $200,000 plummet.

He said foreclosures had also risen by 600 per cent in the region.

“The mortgage stress is definitely being felt especially in this area,” he said.

60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.

What does a million dollars buy in Aussie capital cities?

debt bomb

Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.

“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.

But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.

debt bomb

Property investor Bushy Martin says homeowners are to blame for the crisis. Picture: 60 MinutesSource:Supplied

However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.

One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.

Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.

And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.

That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.

“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.

Related article: Experts warn of ‘debt bomb’ as housing downturn worsens

Source: news.com.au

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Opinion

Queensland is the next property hotspot, experts say

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Queensland is the next property hotspot, experts say

As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.

According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.

Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.

Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.

The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.

The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.

NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.

“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.

Source: brisbaneinvestor.com.au

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Opinion

Gold Coast house values record the biggest growth in Queensland

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Gold Coast house values record the biggest growth in Queensland

The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.

GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.

The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.

Unit prices are up 1.9 per cent to $428,000.

Gold Coast house values record the biggest growth in Queensland
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.

REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.

“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.

“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”

A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.

Gold Coast house values record the biggest growth in Queensland
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams

REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.

“I expect the market to remain strong,” he said.

“There is a heavy amount of interstate buyers moving here.

“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”

Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.

Gold Coast house values record the biggest growth in Queensland
The Gold Coast property market is expected to remain strong.

“We have some of the best health facilities in the country and our universities are world recognised.

“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”

The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.

It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.

Gold Coast house values record the biggest growth in Queensland
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham

Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.

“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.

“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”

Source: brisbaneinvestor.com.au

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