Hotspotting

One of the fundamental factors we look for at Hotspotting when assessing locations is infrastructure.

We want to know that a location has good basic infrastructure – schools, shops, government services, public transport and recreation amenities.

If there is also a major factor in the market like a university campus or a hospital, this can be significant as a big generator of demand for real estate.

In addition is good existing infrastructure, one of the big game-changers we look for is major new infrastructure under construction or in planning.

A $500 million or $1 billion infrastructure project is a big generator of economic activity and employment in an area while under construction – and, with certain types of infrastructure, when completed and operational. And this means strong demand for dwellings, both to buy and to rent.

This is one of key factors that has kept many property markets across Australia busy and vibrant during times of high inflation, high interest rates and economic uncertainty.

And here's the key factor: the level of infrastructure investment currently occurring in the nation is unprecedented, in my experience, which is more than 40 years researching and writing about real estate issues.

Projects under way or completed in 2024 across Australia totalled well over $500 billion, with another $370 billion worth in advanced stages of planning.

These projects include hospitals, universities, airports, motorways, rail links, ship-building enterprises and major energy projects like wind and solar farms.

Partly at least, the level of construction of big infrastructure developments was inspired by the economic damage caused by the Covid lockdown periods and a desire by governments to bring on big ticket projects to generate economic activity and jobs to avoid recession.

These developments can have huge impacts on property markets, because they create demand for workers and for businesses that provide products and services.

And the impacts can be long-lasting.

If a new $1 billion hospital is proposed, it may create 3,000 or 4,000 jobs in construction – but have even bigger impact after it is completed, because there are often as many as 6,000 jobs in the operation of this major facility.

I recently conducted an analysis of infrastructure investment in the capital cities and regional areas of Australia on a per capita basis – in other words, the level of spending relative to the population of the city or regional jurisdiction.

And the places with the biggest impacts from current and planned infrastructure were Darwin, Brisbane, Adelaide and Melbourne among the capital cities, and the regional areas of Queensland and South Australia.

Some of the big ticket infrastructure projects currently happening, with direct and indirect impacts on real estate markets are …

the $31 billion Inland Rail Link, which is connecting Melbourne to Brisbane via regional NSW;

the new Western Sydney airport, which includes new road and rail links, as well as education, medical and commercial precincts, totalling many tens of billions of dollars in investment; and

major new hospital developments in regional cities like Toowoomba, the Gold Coast and Bundaberg in Queensland; Wollongong and the Tweed region in NSW: Albury-Wodonga at the NSW border with Victoria; and several of our capital cities. Many of these hospital projects will each cost over $1 billion and will be massive generators of economic activity and employment, and from that demand for real estate.

It's a key factor to look for when considering good places to buy for future capital growth. A location with a big program of infrastructure developments will always have rising prices.

Owning your first home might feel like a distant dream, but the right financial habits can bring it closer than you think. In this episode of The Property Playbook, host Tim Graham sits down with Glen James—creator and host of the Money Money Money podcast and founder of the Glen James Spending Plan.

Glen shares practical tips on saving smarter, spending wisely, and investing confidently to help first-time buyers achieve their property dreams.

What You'll Learn in This Episode:

• The most common financial mistakes that hold first-time buyers back and how to avoid them. Glen's top strategies for saving a deposit while balancing other financial priorities.
• Practical tips for staying financially resilient in a high-interest-rate environment. Advice for singles re-entering the property market after a separation.
• How the Glen James Spending Plan helps people take control of their money and get onto the property ladder.

Guest Bio:

Glen James is a retired financial adviser with over 10 years of experience. As the creator of the Glen James Spending Plan and the Money Money Money podcast, Glen is dedicated to helping people spend, save, and invest with confidence through simple, actionable advice.

Follow Glen James:

Website: https://www.moneypodcast.com.au/

Podcast: Money Money Money

Spending Plan: The Glen James Spending Plan

Follow The Property Playbook:

Website: www.hotspotting.com.au

Instagram: https://www.instagram.com/timgraham_hotspotting/

In this insightful recording, Tim Graham of Hotspotting is joined by Sam Wakefield, Director of Optalife Financial Planning, to uncover actionable strategies to turn your property portfolio into a steady income stream for retirement.

Whether you're planning for retirement or looking to maximise your current investments, this session provides practical advice to help you achieve financial security through smart property decisions.

What You'll Learn:

Debt Reduction Strategies: Learn how to free up cash flow by managing and reducing unnecessary debt.

Tax Minimisation Tips: Discover effective ways to keep more of your hard-earned money with clever tax planning.

Smart Selling Decisions: Understand when to hold, when to sell, and how to maximise the value of your property investments.

This recording is packed with practical insights and expert advice, offering you the confidence to take control of your property portfolio and make it work harder for your retirement.

📌 Don't forget to subscribe to our channel for more webinars, tips, and updates on property investment insights!

👉 If you're ready to learn more and connect with Sam and his team, please visit www.optalife.com.au

One of the great misconceptions of real estate at present is that high interest rates mean it’s pretty much impossible to find positive cashflow investments.

But the opposite is true. Australia abounds with locations where rental yields are well above average, which means there are good possibilities for securing properties that pay their own way.

And, as a bonus, many of the high-yield places we’re comfortable to recommend to our customers also have great prospects for future capital growth.

That old furphy in real estate that many people still believe – that you need to choose between high yields or capital growth but you can’t have both – has never been true and it’s certainly not so right now.

Our capital cities and many of our key regional markets have opportunities for the winning trifecta of real estate:-

1. Affordable purchases

2. Above-average rental yields

3. Great prospects for capital growth

In the past year, there have been multiple locations across Australia where there has been double-digit growth in prices, similar uplift in rents and gross yields well above 6% - and, in many cases, yields above 7%.

Many of these locations have been found in the boom states of South Australia, Western Australian and Queensland – but they can be found almost anywhere in the nation.

One of the reasons for that is that attached dwellings – units, townhouses and apartments – are being seen increasingly as a good alternative.

Units are challenging houses on capital growth, as more and more people opt for their lower prices, lifestyle features, the low maintenance factor and the important safety and security aspects in many unit buildings.

It means that there are positive cashflow possibilities in inner-city locations in our biggest cities as well as houses and units in smaller, less expensive, cities and in many regional markets.

For all those reasons, our National Top 10 Positive Cashflow Hotspots report is becoming one of our most popular products.

All the key indicators suggest that the Perth boom is past its peak and subsiding.

Our analysis of all the major market jurisdictions across Australia, using a range of different performance metrics, indicates that Perth will not be the leading performer on price growth in 2025 – or anything close to it.

After two consecutive years as the national leader on price growth, we feel confident in predicting that Perth is unlikely to repeat that performance in 2025.

Perth was undoubtedly the national leader on price growth in 2023. Its median house price rose 16 percent (the national average was 8.6 percent) and its median unit price increased 12 percent (national average was 6.4 percent).

In 2024 Perth repeated the performance, leading on both house prices (up 17 percent) and unit prices (up 19 percent), both more than three times national averages – but challenged in both categories by Brisbane and Adelaide.

But it was evident in the latter part of the year that the rate of growth for Perth was slowing month by month. Earlier in 2024, the annual growth rate for houses was well above 20 percent. With each passing month, the annual growth rate is smaller, although it still appears to be impressive.

And, indeed, there is a growing list of forward indicators which say Perth is on the wane.

Perhaps most significant is that sales activity has declined, even though stock on the market has risen steadily since the middle of 2024. In this regard, Perth is the weakest of the major cities and regional markets, with activity steadily waning.

Vacancy rates are also easing and rents are no longer rising rapidly. Indeed, according to the REIWA, there has been little rental growth in Perth since March 2024. With so many investor purchases in the past 2-3 years, rental supply has risen – changing the supply-demand equation.

Other sources indicate a slowdown in population growth and less demand from investors. The buyer frenzy is subsiding, which is confirmed by our conversations with real estate professionals at the coalface of the Perth market.

For those still interested in buying in the Perth market, a key trend is that more buyers are pivoting to attached dwellings.

One of the main catalysts for the Perth boom of recent years was its cheap houses, but now the city's median house price is similar to Melbourne and Adelaide. The relative bargains are now being found in the unit market and there are a number of good options there.

But home buyers and investors considering the Perth market need to be aware that the peak of the market has passed and the stellar price growth of 2023 and 2024 is unlikely to be repeated.

If you're confused about what's happening with rents in Australia, you can be forgiven.

That's especially so if you use news media as your main source of information about residential real estate.

The information – or perhaps more correctly, misinformation – in news media is highly confusing and in many cases contradictory, with one headline saying the complete opposite to another.

Here are two headlines that appeared on the same day, the 10th of January:

The worst is over: slowest rise in rents in four years

Affordability crisis: tenants feel the pinch as rents surge

So, as usual, Australian real estate consumers need to look elsewhere, somewhere other than mainstream media, to find out what's really happening in housing markets.

One of the strange things about residential rents, which pops up regularly in news media, is the bizarre notion that if the latest stats suggest that the rate of growth in rents is slowing, then tenants across the nation are celebrating.

They're apparently popping champagne corks because the rate of rental growth currently is less than it was last year.

Let's be clear: the greatest wish of tenants is NOT slower growth in rents. It's NOT for rents to stop growing. And contrary to the apparent belief of The Greens, they don't want a rental cap. What they want is for rents to FALL.

People who rent in Australia, about a third of households, want to see a bigger choice of places to live in – in other words, they want higher vacancies. And they want rents to come down.

There are two main reasons why that isn't happening and cannot happen:

(1) because vacancies are at historic lows, as they have been now for three years, and there are no remedies in sight; and

(2) because interest rates are persistently high and the owners of rental properties need high rents to cover their costs.

Having said that, it's clear that - in some locations - rents have reached a ceiling and are unlikely to go much higher in the short term. Tenants cannot keep paying higher and higher rents – and higher and higher proportions of their incomes – on rental accommodation.

That is why the rate of growth in rents has slowed in SOME – but certainly not all – locations across Australia.

But the true wish among tenants – for rents to decline – is highly unlikely to happen any time soon.

SNIPPET:

There's a lot of confusing and conflicting information in mainstream media about what's happening with residential rents.

Some headlines have declared that the worst is over for tenants because the rate of growth in rents is slowing down – as a national average.

But other headlines have claimed that rents continue to surge higher and tenants continue to be in a world of pain.

The reality is that rents are still rising, although in SOME locations the rate of growth is slowing down.

But with vacancy rates continuing to be at historic lows in most places across Australia, and interest rates stubbornly high, we don't have the conditions for rents to fall any time soon – particularly as there are no solutions in sight for the shortage which is causing rents to be high and rising.

If you're confused about what's happening with rents in Australia, you can be forgiven.

That's especially so if you use news media as your main source of information about residential real estate.

The information – or perhaps more correctly, misinformation – in news media is highly confusing and in many cases contradictory, with one headline saying the complete opposite to another.

Here are two headlines that appeared on the same day, the 10th of January:

The worst is over: slowest rise in rents in four years

Affordability crisis: tenants feel the pinch as rents surge

So, as usual, Australian real estate consumers need to look elsewhere, somewhere other than mainstream media, to find out what's really happening in housing markets.

One of the strange things about residential rents, which pops up regularly in news media, is the bizarre notion that if the latest stats suggest that the rate of growth in rents is slowing, then tenants across the nation are celebrating.

They're apparently popping champagne corks because the rate of rental growth currently is less than it was last year.

Let's be clear: the greatest wish of tenants is NOT slower growth in rents. It's NOT for rents to stop growing. And contrary to the apparent belief of The Greens, they don't want a rental cap. What they want is for rents to FALL.

People who rent in Australia, about a third of households, want to see a bigger choice of places to live in – in other words, they want higher vacancies. And they want rents to come down.

There are two main reasons why that isn't happening and cannot happen:

(1) because vacancies are at historic lows, as they have been now for three years, and there are no remedies in sight; and

(2) because interest rates are persistently high and the owners of rental properties need high rents to cover their costs.

Having said that, it's clear that - in some locations - rents have reached a ceiling and are unlikely to go much higher in the short term. Tenants cannot keep paying higher and higher rents – and higher and higher proportions of their incomes – on rental accommodation.

That is why the rate of growth in rents has slowed in SOME – but certainly not all – locations across Australia.

But the true wish among tenants – for rents to decline – is highly unlikely to happen any time soon.

SNIPPET:

There's a lot of confusing and conflicting information in mainstream media about what's happening with residential rents.

Some headlines have declared that the worst is over for tenants because the rate of growth in rents is slowing down – as a national average.

But other headlines have claimed that rents continue to surge higher and tenants continue to be in a world of pain.

The reality is that rents are still rising, although in SOME locations the rate of growth is slowing down.

But with vacancy rates continuing to be at historic lows in most places across Australia, and interest rates stubbornly high, we don't have the conditions for rents to fall any time soon – particularly as there are no solutions in sight for the shortage which is causing rents to be high and rising.

The Prime Minister is suffering from a serious case of denial if he believes that his press conference soundbite about building 1.2 million new homes is plausible, credible and achievable.

Anthony Albanese had his big media event in August 2023 when he stated this objective of 1.2 million new homes in five years – but almost 18 months later it's abundantly clear to everyone except members of the government that it's not going to happen – indeed, was NEVER going to happen.

It's almost as if the PM and his cohorts believed that staging the publicity event in 2023 was all they needed to do - make the announcement of a target which has never been achieved in the nation's history and then sit back and watch it happen. Job done.

Here we are in 2025 and all the official data shows that building approvals - and in particular building commencements - are so far behind the levels needed to reach the target, that it can already be dismissed as fanciful – indeed, almost childlike in its naivety and idealistic stupidity.

In the past 12 months building approvals totalled around 170,000 – but approvals don't always translate into actual construction, particularly right now with all the problems in the home building industry.

So we are so far short of where Australian needs to be to meet the target that there is really no realistic hope of achieving it.

And it's noteworthy that the original target date was mid-2029 and now, quietly, hoping that no one notices the Federal Government has moved the target date to 2030.

But when challenged by journalists about the stark lack of results, the PM becomes angry and defensive – as he has done at recent press conferences.

The Federal Government appears to think that the industry should just go out and build the homes because the Government says they should – and is oblivious to the long list of serious problems which are preventing it from happening.

Building companies are going broke at the rate of nine per day and that is happening for a reason – but you have to wonder if the Federal Government is even aware of this reality.

The cost of building new houses and in particular new apartments has become so high, so catastrophically high, that in many instances it's not economically feasible to build them because the average buyer won't pay the increasingly high price for new dwellings.

Is the PM remotely aware of that?

To build homes you need a healthy supply of tradespeople – but the industry has a chronic shortage and needs tens of thousands more to be able to create the dwellings needed – and there aren't enough apprentices coming into the industry.

One of the reasons the home building industry can't find the tradies it needs – and why the ones that exist are increasingly expensive – is because federal and state governments have initiated record levels of investment in infrastructure – and there were over $500 billion in projects happening in 2024 and more to come this year and beyond.

This has removed tens of thousands of tradies from home building - to work on the more lucrative headline projects initiated by politicians facing looming elections.

Is the Prime Minister aware of that? Because it's one of the key reasons his media soundbite home-building target will not be achieved.

Does Anthony Albanese know that the average time it takes to build a house or an apartment has blown out enormously in recent years, thanks to bureaucracy and political interference in the process?

That the cost of building has escalated enormously because of new rules imposed by the various levels of government?

And those factors, plus persistently high interest rates, are the key issues that are sending building businesses broke at the rate of nine per day.

Australia has never created 1.2 million new homes in any five-year period in history and it won't be happening in the five years following the August 2023 publicity stunt by the Prime Minister.

Sadly, Anthony Albanese is in denial about it, so the problems are unlikely to be fixed.

SNIPPET:

The Prime Minister is in denial if he believes that his press conference soundbite about building 1.2 million new homes is plausible, credible and achievable.

Anthony Albanese had his big media event in August 2023 when he stated this objective of 1.2 million new homes in five years – but almost 18 months later it's abundantly clear to everyone - except members of the government - that it's not going to happen – indeed, was NEVER going to happen.

Here we are in 2025 and all the official data shows that building approvals - and in particular building commencements - are so far behind the levels needed to reach the target, that it can already be dismissed as fanciful.

And it's noteworthy that the original target date was mid-2029 and now, quietly, hoping that no one notices, the Federal Government has moved the target date to 2030.

But when challenged by journalists about the stark lack of results, the PM becomes angry and defensive – as he has done at recent press conferences.

Let's be clear: Australia has never created 1.2 million new dwellings at any time in its history and it's not going to happen in this five-year period – so the shortage will persist well into the future.