The Australian property market saw its first monthly increase in property values for the first time since 2017 in August, and as things start to look up, there are some regions set to grow more than others.
Property market research firm Propertyology has found 53 regions which it considers to have the best upside potential for the short- and medium-term, based on the average time to sell a home, how many homes were selling, vacancy rates, employment data and infrastructure plans.
Related story: Best and worst-performing suburbs in the last 5 years
Related story: The one property market showing no signs of recovery
Related story: Inside Australia’s most-viewed house
Head of research Simon Pressley said that while prices are yet to officially firm due to lagging property data, these regions have positive macro changes which should lead to strong growth in the future.
However, he added, it’s unlikely that any growth in the coming 12 months will be “spectacular” given stagnating private-sector job growth.
“The analysis found that fundamentals of Hobart and Canberra continue to be the best of all capital cities with recent positive macro changes for their property sectors likely to see their price growth rates accelerate,” Pressley said.
“Perth, Brisbane and Adelaide are all at the right stage of the property cycle with balanced supply and housing affordability.”
For Melbourne and Sydney, the story is a bit different. With values closer to October 2016 and June 2015 levels respectively, the two cities will likely see a long period of low capital growth. Should the Reserve Bank of Australia cut again, those values could slide further - despite seeing some growth in recent months.
Outside of the capital cities, dozens of regional locations hold strong prospects.
“One such example is the New South Wales university city of Armidale in the New England region,” Pressley said.
“It has already seen a significant reduction in real estate selling times, tightening vacancy rates, and has an admirable list of major projects, which is fuelling job growth and community confidence.
“The median house price in Armidale has increased by an impressive annual average of 6.2 per cent over the past 20 years and still sits at an affordable $350,000.”
The other 50 housing hotspots with strong signals
New South Wales
The research also found that inside New South Wales a rebound in commodity prices and jobs growth was now starting to support price growth in several regions.
“Regional property markets which support precious metals such as gold and copper are strengthening and include Mount Isa, Charters Towers, Orange, Cobar, Swan Hill, Bendigo, Kalgoorlie, and Roxby Downs,” Pressley said.
Wagga Wagga, Coonamble, Parkes, Murrumbidgee, and Dubbo also got shout-outs, as did Muswellbrook which is supported by the coal sector.
The coal sector is also supporting value growth in Mackay, Moranbah, and Emerald in Queensland, Pressley noted, suggesting these regions have growth in their future.
However, while southeast Queensland’s Brisbane and Gold Coast are where the headlines lie, Pressley said job creation there is much lower than in regional Queensland.
Propertyology found the pipeline in Cairns and low housing supply means that region is a hotspot, as are Hervey Bay, Gladstone, Rockhampton, Townsville and Mackay. He said buyers should also think about Beaudesert, Lockyer Valley and Warwick.
“Likewise, expansion within Western Australia’s iron ore and lithium resources sector is fuelling improved property market performance in Port Hedland, Newman, Karratha and Bunbury,” he said.
“Propertyology is surprised that Perth hasn’t seen a return to price growth by now but there are indications of tightening in municipalities such as Armadale, Bayswater, Joondalup, Rockingham and Swan.
“The near-term outlook for Karratha and Port Hedland seems good, however, positive property market signs are also evident in regional Western Australian cities of Albany, Geraldton, Esperance and Bunbury where the economy is more diverse.”
Down south, Bendigo’s low vacancy rates, shortening time to sell - 24 days faster since 2017 - and a growth in job ads means it’s well-placed to grow.
“Wangaratta, Shepparton, Bairnsdale, Colac, Benalla, Swan Hill and Latrobe are other Victorian locations displaying some positive signs, while Mildura ticks many of the right boxes, however, the growth cycles in Geelong and Ballarat are nearly over,” Pressley added.
Yahoo Finance’s All Markets Summit is on the 26th of September 2019 at the Shangri-La, Sydney. Check out the full line-up of speakers and agenda for this groundbreaking event here.