Hotspotting

Mainstream media tends to present CoreLogic price data as the definitive view on real estate prices – indeed, the only view.

So when CoreLogic says house prices fell (slightly) in Sydney and Melbourne in March, media presented that as fact.

But it’s not fact. It’s simply the world according to one research source.

There are other credible, reputable research entities in Australia, including Domain, SQM Research and the ABS.

And often their data contradicts the CoreLogic figures.

It is important for real estate consumers to be aware that there are different stories being portrayed by the research figures, depending on where you source your data.

And, in the final analysis, it doesn’t really matter which is more accurate. Because both are depicting what recently happened – allegedly – with property prices.

And that does not inform the future.

In real estate investment, it’s the future that matters, not the recent past.

According to the latest CoreLogic figures, the national rate of growth in dwelling values actually rose in March – slightly – compared to February.

The best advice I can give you is to tune out all the white noise in mainstream media and do some real research.

Don’t read the media reports – get a copy of the CoreLogic report, which is free, and look at what the numbers actually say, free of the media misinformation.

How will the Melbourne market perform in 2022, free of lockdowns and with major new factors in play, including the opening of international borders?

I expect Melbourne to have a strong year in real estate in 2022.

Last year, Melbourne did well, despite being the most locked-down city in the world.

Despite all the restrictions, Melbourne produced strong price growth, particularly for houses.

Opening of international borders means that overseas migrants and foreign students can return – and this, I believe, will have a big impact on the Melbourne market in the near future.

THE Prime Minister may like to say he is helping those who can’t find a place to rent by helping Australians BUY a property, but from my point of view both the Federal Government and the Federal Opposition are yet to grasp just how enormous the rental crisis is in Australia.

There has been nothing in recent weeks which shows me that any of our Federal Politicians have any awareness of just how big a problem it is for everyday Australians.

Neither of the major parties has announced anything to support those many Australians caught up in the rental crisis and in fact there has been very little to address housing affordability in a meaningful way either.

Yes, there was the announcement that the Home Loan Deposit scheme would be expanded for three years to make it a little easier for First Home Buyers to get into the market, once they have saved a deposit of 5%, but that still doesn’t do anything about the ever-growing cost of housing.

Some analysts claim it makes it worse.

Regional Victoria was one of the first areas in Australia to really exhibit clearly the pattern that has become the major property trend of the 21st Century – what I like to call the Exodus to Affordable Lifestyle. I expect this trend to continue for some time to come – it won’t stop once the pandemic is dealt with – because this is fundamentally about technology, affordability and lifestyle.
Regional Victoria as a whole is still a very strong market, which has produced outstanding price growth in the past 12 months, with many locations rising 20% and some above 30%.
In our Autumn prices survey, of the 142 regional Victorian locations analysed, 140 have recorded growth in their median house prices in the past year,  and 141 have had growth in the most recent quarter.
Regional Victoria is still a market which has a lot further to go, particularly as I don’t see the Exodus trend easing any time soon.

To that end many people planning to buy an investment property buy one or two of our Hotspot reports.

For example, if they are thinking of buying in Victoria, they might purchase the Top 5 Melbourne Hotspots report or the Top 5 Regional Victoria Hotspots report.

Investors keen to buy in Queensland will be interested in the Top 5 Brisbane Hotspots report or the Top 5 Regional Queensland Hotspots report – or both.

But some people treat property investment as a long-term enterprise, with a strategy of buying regularly over the next 5 or 10 years or more.

They don’t intend to stop at one investment property – they want to build a substantial portfolio over time.

Those are the investors who like to get all of our reports.

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Infrastructure spending is a very powerful factor when it comes to investing in residential property.

It’s one of the key elements we look for in areas we’re comfortable to recommend to our investor clients.

We have created a national report to highlight the locations best situated to receive real estate growth from this compelling national trend.

The Infrastructure Led Economic Recovery National Top Ten report identifies the areas where big infrastructure projects are under construction or in planning - which allows investors to get in front of the trend.

Get Your Copy Now

AMP Capital economist Shane Oliver loves to dabble in areas where he’s not an expert, including property market forecasting – and over the years he’s made some bizarre statements and got it horribly wrong more often than any other high-profile commentator.

But this time he’s exceeded even his own wacky standards – he’s predicted that the war in Ukraine could result in Australian housing prices dropping by up to 15%.

If this concerns you at all, I can tell you it won’t happen.

One of the best indicators of future property price growth – or decline – in a specific location is the pattern with transaction levels in the area.

Every three months we analyse property sales activity in every significant suburb and town throughout Australia for the quarterly editions of The Price Predictor index and this analysis reveals the locations where prices are likely to fall or stagnate or decline.

Sales volumes are always a good indication of future property price movements.

When sales numbers rise steadily over consecutive quarters, prices inevitably will rise. Fortunately, there is a time lag between a change in market activity and major impact on prices, and this allows investors who spot the trend to buy ahead of the price growth.

Conversely, if there is a steady quarter by quarter decline in sales activity in a location, price growth is likely to falter and in some cases prices may decrease.

This analysis forms the basis on The Price Predictor Index report which I regard as our most important report.

Residential rents continue to rise as vacancy rates fall further right across Australia, both in the capital cities and in the regional areas.

The best source of information on vacancy rates comes from SQM Research and their managing director Louis Christopher says vacancy rates in six of our capital cities are below 1% and they’re around 2% in both Sydney and Melbourne.

In most regional market, vacancies are well under 1% - and in some places they’re closer to zero than to 1%.

Now, keep in mind that accepted benchmark for a balanced rental market is a vacancy rate of 3% and anything under 3% represents a shortage.

Right now there’s a rental shortage crisis almost everywhere in Australia.