Hotspotting

Usually the term “a perfect storm” refers to a highly negative scenario.

One definition says a perfect storm is “an especially bad situation caused by a combination of unfavourable circumstances”.

I’d like to turn that around, because right now there’s a perfect storm of scenarios impacting real estate market and they’re overwhelmingly favourable for property investors and for real estate growth, while being extremely unfavourable for anyone looking for a place to rent.

Right now, real estate markets are being impacted by a well-entrenched imbalance between supply and demand – and it’s becoming increasingly pronounced.

Property markets across Australia have grown stronger as 2023 has progressed.

And this notable resurgence has been led by Sydney, which we regard as the leading market in the nation.

It is the market with the strongest data on sales activity, slightly ahead of Perth, and it’s also a national leader of price growth in 2023, both for houses and for apartments.

Sydney had shown signs of recovery early in 2023 but our most recent analysis shows that the city’s market has gone to another level more recently.

Most of the suburbs across Greater Sydney have experienced significant improvement in their market activity – which puts Sydney at the forefront of a national revival in sales volumes. 

Regional NSW is part of the emerging recovery theme which dominates the national real estate scene, although its revival is perhaps a little less emphatic than some of the other states.

Earlier in the year, when Hotspotting conducted its Winter survey of sales activity, only a third of Regional NSW locations had positive outcomes.

But more recently our Spring survey revealed that two-thirds of locations had positive rankings.

This represents a meaningful turnaround in the Regional NSW market overall, although some high-profile locations like Byron Bay have yet to join the revival.

The biggest cohort in Regional NSW now is the recovering markets. 

Attention all savvy property investors! Are you looking for the most affordable investment hotspots in 2023? Then catch our recent webinar hosted by Hotspotting.com.au's Terry Ryder and Tim Graham.

Hotspotting's latest research and analysis on real estate markets has yielded an encouraging outlook for 2023 and beyond, following 18 months of turbulence and declining sales activity in many markets. Learn their top strategies for identifying emerging markets that offer rising sales activity and strong potential for capital growth at affordable prices.

News media is always happy to sensationalise an issue or embellish the facts to make sales but sometimes they go beyond what has always been known in the journalism industry as a beat-up. Sometimes, indeed increasingly often, what we are presented with is an outright lie – with journalists happy to present their customers with misinformation. It’s highly unethical and dishonest – and in legal terms there’s a word for it – it’s called fraud – seeking to make money dishonestly.

I recently attended the annual national conference in Sydney of PIPA, the Property Investment Professionals of Australia. In many ways this is the most important organisation in Australia in terms of finding solutions to one of the nation’s most pressing problems, the rental shortage. PIPA comprises people who deal every day with the people who supply over 90% of the homes that people rent in Australia – private investors. They’re often referred to as mum-and-dad investors, because most of the people who own investment real estate are ordinary households on average incomes who own just one investment property. This very important cohort provides the product which is in short supply and it would make sense for politicians to encourage them in any way possible to solve the shortage crisis. But the opposite is happening. Private investors are being massively discouraged and they’re leaving the real estate market in droves, as the new PIPA survey graphically illustrates. And that, in essence, is why we have the rental shortage crisis.

The person in the image behind me is Australia’s dumbest and most dangerous politician. I know that’s a pretty big statement, because Australia is full of politicians who are none too bright and who have ideas and policies which would be extremely damaging if they everbecame law – particularly on issues relating to the housing industry. But this character is the pick of a very bad bunch.

Now, more than ever, property buyers are seeking affordable options. First-home buyers are finding it harder to get into the market - through the combination of higher prices AND higher interest rates which reduce their borrowing capacity. Investors, too, are chasing more affordable options, because they also face the difficulty of higher interest rates and lower borrowing capacity pushing them into lower price brackets.

One of the most dishonest and unethical things that politicians commonly do in this country is to find a way to increase taxes on specific sections of the Australian population - but present it to the public as a measure to improve life for ordinary people. We’re seeing this currently with attitudes to citizens who seek to establish a business by letting a property they own to tourists and other short-term visitors to the area. These kinds of properties typically use systems like Airbnb or Stayz and they’re popular with travellers who prefer to stay in a house or an apartment rather than a motel or a hotel room. And of course they’re perfectly legal and a reasonable thing for property owners to do to create a sustainable business. But local authorities have seized on this as another way to raise revenue.