With markets rising – fast – in most markets across Australia, it feels like you could buy anywhere and achieve capital growth.

And that may be true – in the short term.

But sensible investors will be thinking beyond the current frenzy in markets nationwide.

They will be taking a long-term view.

And that means buying in locations that have identifiable drivers of price growth beyond the current nationwide property boom – keeping in mind that some markets, particularly those which started rising BEFORE the nationwide boom, appear to have passed their peaks.

Ultimately, I believe some investors will be disappointed in the long-term performance of their investments, because they haven’t considered their choice of location with sufficient care.

We have just published our latest edition of our most popular report, the National Top 10 Best Buys.

This is the new edition for 2022, focusing on locations I expect to out-perform in the New Year.

In making my choices for the 10 special locations included in this report, I have thought about the factors that will drive capital growth in the long term.

I have sought to target places that are relatively early in the growth cycle.

And I have opted for places which offer a degree of affordability, because I believe that will increasingly be a factor in 2022.

That is why some of the nation’s most high-profile markets are NOT included.

Because they have already had, in some cases, three or four years of strong price growth.

I want the highlight the places that have the potential to do that, but are just getting started on a longer-term growth path.

So grab a copy of our new National Top 10 Best Buys report and find out where to buy in 2022 for growth is sustainable, beyond the current frenzy.

https://www.hotspotting.com.au/product/national-top-10-best-buys/

In media discussions about the many strong property markets across Australia, one city that often tends to be overlooked is Perth.

Perth, in fact, is one of the most buoyant markets in capital city Australia, particularly in terms of the strength of sales activity.

Our latest quarterly survey of sales volumes shows that Perth continues to maintain a very high level of performance, with 65% of suburbs classified as rising markets – one of the strongest results in the nation.

The 116 suburbs classified as rising markets is the second highest number for Perth in the six years we have been conducting our quarterly surveys of sales activity.

To put this into perspective, in the surveys from 2015 through to the end of 2020, the average number of rising suburbs in Perth was 29.

The four surveys conducted in 2021 have revealed 118, 103, 115 and 116 suburbs with rising sales momentum.

This means the Perth market is at its strongest since the end of the resources investment boom in 2013.

This strength is reflected in both the number of locations with rising sales activity and in price growth outcomes.

Prices are growing right across the Greater Perth area, although not yet at the same rates as elsewhere in Australia.

Of the 177 suburbs included in our price analysis, all but two had annual growth in their median house prices – with 155 of them rising more than 5%.

And there is potential for price growth to accelerate, given the high level of market activity that is currently occurring.

Against this backdrop, we have just published the new 2022 edition of our Top 5 Perth Hotspots report.

It’s a report that warrants some attention from investors, because it outlines the locations we expect to perform best in a year that promises to be one of the best ever for the Perth property market.

https://www.hotspotting.com.au/product/top-5-perth/

The year just ending has been one of the most remarkable ever in Australian real estate.
It has produced outcomes which defied the doomsayers, with price growth that exceeded everyone's expectations.

And now our thoughts turn to 2022: what can we expect of the year ahead?
Will property prices continue to rise? And, if so, will the growth levels match those of 2021?
Will interest rates rise and does it matter anyway?
Will the re-opening of international borders and an influx of overseas migrants create a second wave of buyer demand?

At this special webinar event on 8 December, Hotspotting founder Terry Ryder facilitated a discussion with our panel of property experts to find answers to these and other questions about prospects for 2022.
Our panel includes investment advisors, buyers agents and mortgage brokers and each brings a perspective informed by years of experience at the coalface of housing markets across Australia.

Anyone who tunes into mainstream media in this country will be aware that there is endless speculation about what’s going to happen with interest rates.

This is happening for three reasons.

One, journalists and commentators apparently believe we’re all breathlessly interested in what might happen with interest rates some time in the future. I think they’re wrong.

Two, journalists and commentators generally lack imagination and are collectively incapable of coming up with original and useful story lines.

And three, they all apparently think that Reserve Bank governor Philip Lowe is a shameless and habitual liar.

The Reserve Bank governor has declared publicly, repeatedly, almost weekly, that the RBA has no intention of lifting the official interest rate any time soon.

Philip Lowe has stated many times that he expects the next interest rate to be in 2024.

So, no interest rate next year and no interest rate rise in 2023.

But media keeps telling us that interest rates will rise in 2022. That’s their first mistake.

Their second mistake is that they apparently believe that an interest rate rise will bring the property market crashing.

A rate rise will cause massive mortgage stress, apparently, and prices will fall.

I’m happy to go on the public record as saying that they’re wrong and that none of this is going to happen.

And here’s why.

Firstly, history shows us that an interest rate rise does not halt a strong property boom.

Indeed, two or three interest rate rises don’t make a dent in a booming housing market.

In the recent past, it has taken 5, 6 or 7 interest rate rises to bring a raging property market under control.

It’s worth noting that the last time we had genuine nationwide property booms in Australia, in the late 1980s and in the early years of this century, they occurred during times of very high and rising interest rates.

Secondly, the notion that interest rate rise will collapse the property market is based on the premise that the current boom has been caused, wholly and solely, by record low interest rates.

Economists are telling us this every day, demonstrating yet again how little they understand about the housing market.

My list of reasons for the national property boom has 16 dot points, with the level of interest rates just one of them.

Low interest rates didn’t cause the boom  - and rising interest rates, if and when they occur, won’t stop it.

Thirdly, media speculation about mortgage stress caused by future rises in interest rates overlooks the buffers that are in the system.

Most households are well ahead on their mortgage payments – years ahead, in many cases.

And borrowers are not assesses on current interest rates, they’re assessed on current rates plus 3%.

So anyone taking out a home loan with a 2% interest rate, will be assessed by the bank on their ability to repay the loan if the interest rate is 5%.

So rates could double and most borrowers would still be comfortable.

In summary, if you’re thinking of buying real estate and you’re worried about all the media speculation about interest rates, forget about it.

Ignore it. Tune out all this media white noise and just get on with it.

Media has gone overboard on the forecast by the Commonwealth Bank that property prices across Australia will fall 10% in 2024.

As consumers, we can rest assured that it won’t happen - because the people making these forecasts have a track record of getting it horribly wrong in their property market predictions.

There are two major things wrong with the media treatment of forecasts like this:-

One is the speed with which media turns a forecast into a fact. It’s not a case of someone forecasting that prices may fall 10% in the future, but it’s presented as: prices WILL fall 10%.

The second is that journalists never check on the forecasting record of the people they’re publicising. If they did, many high-profile forecasters would never appear in media – because they constantly get it wrong.

The Commonwealth Bank’s latest prediction on prices comes from the CBA’s head of economics, Gareth Aird.

Media assumes this is credible because it comes from one of the Big 4 banks and CBA is our biggest mortgage lender. They must know what they’re talking about, right?

Well, actually, NO.

Based on his track record, Gareth Aird is one of the nation’s worst forecasters.

Let’s look at what he predicted in March 2020 as the pandemic first took hold.

He forecast that residential property prices would drop 10% over six months and 20% in the next year, led by steep falls in Sydney and Melbourne.”

BUT in the next 12 months house prices overall rose 7.5%, with Sydney up 8%, Adelaide 9%, Hobart 13%, Canberra 14%, Darwin 16% and Regional Australia by an average of 13%.

Now, let’s look at his forecast at the start of 2021.

In February 2021, Gareth Aird on behalf of the Commonwealth Bank, was forced to admit they’d got it seriously wrong a year earlier and were now predicting price rises.

But their forecast was: House prices will rise 9% in 2021 and unit prices will rise only 5%.

What’s actually happened? House prices have risen 21% and unit prices 13% in the first 10 months of the year alone.

Once again, they’ve underestimated housing markets across Australia. And they continue to discuss Australia as a single unified market, without allowing for many regional differences.

Let’s face it, Gareth Aird would struggle to accurately forecast what happened yesterday.

And why does this failed forecaster think prices will fall in 2024? Because he expects interest rates to rise and this will generate a big drop in prices.

This, I have to say, is kindergarten analysis. Simplistic, misguided and plain wrong.

Regional Victoria continues to be an outstanding performer on price growth, although the sales activity data suggests that some locations have passed their peak.

Regional Victoria has been a strong growth market for past two years – and some of the key locations, like Geelong and Ballarat, have been growth markets for 3-4 years – so it’s not surprising that the markets which have strong for longest are now fading a little.

On the other hand, many locations throughout Regional Victoria stepped on to the growth path only in the past year and still have plenty of uplift still to come.

Meanwhile, Regional Victoria continues to be one of Australia’s outstanding performers on price growth.

Of the 142 locations included in our recent price analysis, only two have failed to record annual growth in their median house prices. Only three have failed to deliver increases in the most recent quarter.

Of the 140 suburbs and towns which had median house price rises in the past year, 137 have grown by 5% or more – and 48 have grown by 20% or more (compared to 25 suburbs in Melbourne with that level of house price growth).

So, in that regard, Regional Victoria is outperforming Melbourne.

Against this background, we have published our new edition of our popular report, Top 5 Regional Victoria Hotspots.

This report is essential reading for anyone planning their investment decisions for the coming year as it provides research-based evidence of the markets we expect to do well in 2022 and beyond.

Get a copy of our new Top 5 Victoria Hotspots report.

Melbourne has defied the negative impacts of multiple long lockdowns  - including the prolonged one that ended in October 2021 - to deliver consistently solid growth in prices right across the metropolitan area.

While Melbourne’s overall price performance is less spectacular than other jurisdictions, but it is extraordinarily positive in the circumstances.

Melbourne has been declared the world’s most locked-down city. Melbourne has endured 262 days, or nearly nine months, of restrictions during six separate lockdowns since March 2020, representing the longest cumulative lockdown for any city in the world.

Despite that, 95% of Melbourne suburbs have recorded growth in their median house prices in the past year and 97% have had growth in the latest quarter. Only nine suburbs across the Melbourne metropolitan area have experienced a decline in median house prices in the latest quarter, which coincided with the city’s latest long lockdown.

Of the 283 Melbourne suburbs in our recent price analysis, 270 have recorded annual price increases, including 235 which have grown by 5% or more.

Melbourne has also maintained a surprisingly high number of suburbs with upward momentum in their sales activity.

In our latest quarterly survey, we identified 153 suburbs with rising sales activity, despite all the restrictions which afflicted the market – including a lockdown that extended from early August through to late October.

This is the third highest total of rising suburbs in the six years we have conducting these quarterly surveys.

Against that backdrop we have published our new edition of the Top 5 Melbourne Hotspots report.

Get a copy today to find out which parts of the Melbourne market are tipped to thrive in 2022, as the city embraces a new set of more favourable circumstances, which are likely to include a return of international students and an influx of overseas migrants.

Get a copy of the Top 5 Melbourne Hotspots

The Australian Financial Review, which allegedly is one our most serious and respectable newspapers, recently published a headline and article which declared that Australia is on the cusp of a rental crisis.

It beggars belief that this supposedly credible publication has only just realised that there’s a serious shortage of rental properties in Australia.

Australia has had a chronic shortage of homes available for rental for several years and it’s getting worse year by year because our state and federal politicians appear to be oblivious to the problem.

Right now, locations with vacancy rates below 1% are the norm across the nation.

This means there’s a dire shortage of rental properties almost everywhere.

And, as a consequence, rents are rising strongly in cities and regional centres all over the country.

In many locations, hopeful tenants can’t find a rental property at any price. But where there is something available, there’s lots of competition from other prospective tenants – and it’s common for people to offer more than the asking rent to beat the competition.

So rents are rising, almost as fast as sale prices.

But this is not a new situation. This has evolved over the past five years, as a result of a series of major decisions by politicians and bureaucrats which have discouraged property investment in Australia.

Decisions by various state governments, decisions by the Federal Government, mandates from APRA and rhetoric at the last two Federal Elections by the Labor Party – have all worked to discourage property investors.

Rental vacancies are an outcome of investor activity. When investors buy real estate, homes become available for tenants to rent.

But, for the past few years, investors have been sitting on the sidelines.

So, steadily, little by little, vacancies have become smaller and smaller.

The only way to fix this problem is for governments to stop discouraging investors and do the opposite – provide incentives for investors to get into the market and lift the pool of homes available for rental.

The bottom line - is that this situation is not great for people who need to rent, it IS a great time to be a landlord in Australia.

New data on property prices from CoreLogic indicates that the average Australian home has increased in value by $127,000 in the past 12 months.

While that sounds spectacular, there are suburbs and towns in this country where median house prices have grown that much in the last three month alone.

Looking more broadly, if we look at median house prices in some of our cities a year ago and compare them with the current situation, we find that the median house price in Brisbane has increased by almost $200,000 in the past 12 months, and there’s been a similar rise in Hobart.

In Sydney, the median house price is now $360,000 higher than it was a year ago.

The latest price data, up to the end of November, reveals that Australian house prices show no sign of slowing down.

There was a further increase of 1.4% nationally in November, led by a 2.2% monthly rise in the Combined Regions.

Growth in median house prices in November was led by 3.2% rise in Brisbane, followed by Adelaide (2.6%) and Regional NSW (2.5%). The regional markets in Queensland, Tasmania and South Australia all rose by 2.2% or 2.3%.

In the latest quarter, house prices rose 4.7% nationally and units 3.2%, while in annual terms house prices are up 24.6% and unit prices 14.2%.

The data shows no sign of the slowdown in price growth reported in some sections of the media.

Annual growth in house prices is being led by Regional Tasmania, Regional NSW and Sydney, which have all risen about 30% in the past 12 months.

Other jurisdictions to record big increases include Brisbane, Canberra, Hobart, Adelaide, Regional Queensland and Regional Victoria.

They’ve all increased by between 24% and 28%.

So, while media outlets seem to be competing to be the first to declare an end to the property boom and desperately searching for evidence to support the claim, these latest figures show that price escalations at continuing at exceptional pace in most markets across Australia.

The best way to learn how to build a property portfolio is to speak to people who have done it with resounding success.

On Wednesday evening 24 November Hotspotting provided that opportunity, with a webinar featuring successful property investors.

Hotspotting founder Terry Ryder hosted a discussion with real estate consumers who have created strong portfolios of residential properties which provide positive cashflow and have delivered spectacular capital growth.

They outlined their investment philosophies and the tools they have used to steadily build property portfolios worth many millions of dollars.