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Where is property market success projected to be heading?

At a recent Q&A following a presentation, Anna explored Canberra as an investment opportunity and delved into the purchasing of units.

According to the latest QBE Housing Outlook Report, The Australian Capital Territory has the highest percentage of investor loans at 21.4%.

Population growth is one of the key indicators that impacts the property market performance. So, let’s take a look at the predicted population numbers across the country.

Victoria and the ACT have the highest predicted population growth for 2017-2020 at 11.8% and 9.2% respectively, according to the latest QBE report. With Tasmania having the lowest at just 1.6% for the same above-mentioned period.

One of Suburbanite’s key investment locations has been the strongest performer in the country for the 12 months to June 2017. According to the latest QBE Housing Outlook Report, Melbourne lead the market with 10.2% growth for the housing sector. Meanwhile, Darwin and Perth are still retracting by -6.3% and -7.5% correspondingly. Suburbanite has been avoiding Darwin and Perth for a number of years now as our research shows that neither market have hit the recovery stage of the property cycle just yet.

Interested in how the property market will perform in the next three years? Let’s look into that real estate crystal ball with an overview of the predicted growth forecast for the 2017-2020 housing sector according to the latest QBE Australian Housing Outlook report.

As expected, coming off the boil over the next three years is Sydney. Sydney is expected to see a decline in values of 0.2%. Darwin is also projected to retract by 0.9% on average.

The predicted strongest performers are Canberra and Melbourne, to lead the way with double digit growth expected for Melbourne at 10.2% and 9.2% for the ACT. They will be closely followed by Brisbane and Adelaide hovering around 7% each.

Surprisingly, QBE’s pick is Hobart, with an expected growth rate of 10.8% for the 2017-2020 forecast, but this is not supported by the predicted population growth being the lowest in the country at 1.6%. In our opinion, this will be one to watch as we can’t see the fundamentals behind this bold call by QBE. Time will tell.

The unit sector is set to perform quite differently to the housing sector. Much more modest growth is anticipated than the housing sector and negative growth has been predicted for Sydney, Melbourne, Brisbane, Perth and Darwin. Brisbane has been tipped to be the worst performer in this sector with an anticipated decline of 7.2% for the period.

It is interesting to see that the negative growth anticipated for the unit sector is almost the same as that for the positive growth expected to be seen in the housing sector for the same period, creating a 14% differential. This can be largely attributed to the oversupply in the new unit market putting downward pressure on growth and rental returns.

Oversupply is a risk factor that Suburbanite have been banging on about for decades, and have worked hard to strategically avoid pockets that are susceptible to oversupply issues.

This video explores this notion and tackles the roaming questions in regards to Canberra specifically and investing in units.

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