Potential investment hotspots still abound in easing real estate market
With prices declining in Sydney and Melbourne and property price growth around the country slowing in most markets, there are still abundant buying opportunities as identified by regular API Magazine contributor Lloyd Edge.
An uncertain economic future is causing the property market to decline. Rising inflation, interest rate hikes and a looming recession are making home buyers and investors alike wary about committing to any big financial purchases for the time being.
However, a declining property market is also an excellent opportunity for savvy investors to get into the market while prices are low before another boom cycle kicks-off and the market starts to rise again.
For investors who want to know where they should buy now to make the most of the next property boom, here are some recommendations of suburbs and regions that present value and opportunity in an easing market:
Southwestern Sydney and the St George area
Sydney apartment prices are in decline, so now is a great time to get better value for your money. The Southwestern and St George areas are great opportunities because the average price point for apartments and houses is lower than the rest of Sydney.
Rental yields are high, which is important, as positive cash-flow can help investors mitigate against the risk of rising interest rates. These areas also have strong growth potential in the next few years.
Top suburbs to watch include Kogarah, Rockdale, Bexley, Camden, Campbelltown, Ingleburn and Glenfield. The first three have proximity to Sydney Airport and are only 15 minutes to the city CBD via train.
The southwestern suburbs will benefit from the construction of the new state-of-the-art Western Sydney Airport slated to be completed in 2026. Property values should then grow significantly, so the time to get into the market is now before the boom happens.
Melbourne CBD/South Yarra
Apartments in the Melbourne CBD and South Yarra are also in decline. They’re undervalued at the moment but are likely to rise again when the demand inevitably starts to pick up. This is a great opportunity for investors looking for under-market-value properties with high rental yields and strong growth potential.
However, the suburbs are currently undergoing gentrification, and soon the prices will start to rise.
It’s a great suburb for investors to buy into now and benefit from capital growth in coming years. Also, due to the 2032 Brisbane Olympic Games, property prices all over Brisbane are anticipated to rise.
Property values in strategically located areas in regional Queensland are also likely to increase, for example Bundaberg (close to the Great Barrier Reef) and Moreton Bay (proximity to both Brisbane and the Sunshine Coast).
Orange in New South Wales is one of Australia’s fastest growing regional cities, with a trend of Sydneysiders moving there for a lifestyle change. The region is supported by several different industries, including healthcare, manufacturing, education and mining, and it has a Charles Sturt University campus.
The region is also a popular tourist destination and home to some beautiful wineries.
Albury and Wodonga
Albury and Wodonga are twin cities on the border of regional New South Wales and Victoria. An up-and-coming regional hub, it is Australia’s 20th largest city, with the population expected to grow by a further 30 per cent in the next 10-15 years.
The region is supported by several industries, and is home to two major university campuses, La Trobe University and Charles Sturt University.
Famous for its wineries and a popular tourist destination, many city people are moving to regional South Australia for lifestyle reasons.
The properties are still affordable compared to major capital cities and provide good rental yields. If you’re thinking of buying into the Barossa Valley region, now is the perfect time, before the market booms and prices rise again.
If you’re currently one of those people on the fence about buying an investment property, wondering whether or not you should take the leap, my advice to you would be “No one ever got ahead by waiting.” If you wait for lower interest rates, or until the recession is over, you’re likely to see property prices start to rise again, and then you would have missed your chance to get into the market before another boom.
DISCLAIMER: All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest or take any specific action.