Although property prices have been steadily falling across most Australian cities, the latest figures from CoreLogic show home values in several of our nation’s smaller capitals are holding their own.
The shift in investor demand has occurred as a result of tighter credit lending. However this change is mostly being felt in the larger property markets of Sydney and Melbourne.
We have looked at the results in some of the nation’s smaller capital cities and the areas continuing to show growth, which could provide the next opportunity for buyers to invest.
Hobart was the only state capital where prices rose last month and values are up 7.2 per cent in the past year. The Tasmanian capital city is benefiting from mainlanders cashing out and moving to the island state for a more relaxed lifestyle and investors chasing capital growth in a tight market. Plus, the median house price is an affordable $457,186.
Brisbane’s eastern suburbs have witnessed a price rise of 16 per cent over the last three years. According to CoreLogic growth areas include Pallara, Nudgee and Highland Hill. These areas recorded a price growth of 35.8 per cent 7.7 per cent and 7.6 per cent over the past year. For Nudgee and Highland Hill this same growth percentage has also been reflected annually over the decade. Highland Hill has a relatively affordable median house price of $650,000.
Moreton Bay is another value proposition Brisbane suburb, with new infrastructure set to be built, as well as being declared a priority development area by the state government. As a result, the area has become one of the highest-growing shires across Australia.
Adelaide is currently one of the most affordable, relaxing and liveable cities in Australia. The rental market strongly favours landlords with a tight vacancy rate of 1.2 per cent. As a result, rents in the region are rising rapidly, increasing by 2.6 per cent to $387 per week for Adelaide houses and 3.4 per cent to$299 per week for Adelaide units over the past year.
According to recent SQM Research, Adelaide rents are predicted to continue to rise a further 3-5 per cent in 2019.
Canberra was the only capital city where asking prices increased for both houses (at 3.4 per cent) and apartments (at 7.9 per cent) during 2018.
According to CoreLogic, Canberra’s employment growth remains robust and unemployment is the lowest of any capital city. This is also being reflected where household incomes, the ratio of dwelling price to income in Canberra is unchanged at a healthy 5.0 per cent.
The Perth property market has shown significant signs of recovery over the last twelve months, with vacancy rates falling below 3 per cent. Rental values also increased and prices are expected to rise significantly in 2019 across the whole of Perth by at least 10 per cent, making Perth property more attractive to investors.
Population growth in the east and south-east of Perth will attract infrastructure to support those communities, which is why those areas are ideal investment hotspots. The sweet spot for
entry-level investors is the $350,000-$480,000 price point where properties in this range are providing close to 5 per cent yield.
Darwin has recorded the largest decline in dwelling prices, according to February CoreLogic data. As a result, it is the only capital city where the median rent for a three-bedroom house has declined.
The rental market is performing no better, with data highlighting that along with Sydney, both cities had the weakest rental conditions among all other capital cities. Landlords collected 5.1 per cent less rent in November 2018 than they did in November 2017.
As such, CoreLogic are predicting more of the same conditions throughout 2019.