The next hot areas – North East Brisbane and Adelaide
The bubble, which is the Sydney property market has now seemingly fully inflated, and certainly sits precariously floating within an economy that could be fraught with dangerous edges, just waiting to pop it. Whether this bubble will actually burst is debatable, but one thing is certain – the best gains in the Sydney market are behind us, for now.
It’s interesting to read the media, enthusiastically reporting on the rise and rise of Sydney property as if this market was the last bastion in property markets. Effusively quoting a ‘booming property market’ as if this description applies to the entire country has been like a sport of late. But tell those in Tasmania, Adelaide and Perth, to name just a few, that they are in the grips of a property boom and you may be met with a somewhat annoyed response or a look of surprise.
It’s easy to get caught up in this frenzy and many who bought in Sydney just a smidgeon too late certainly did – but what is the true story?
I recall some six or seven years ago reading the bemoaned commentary of the average NSW journalist, decrying the state of the ‘state’ and blaming the government for the lacklustre and stagnated situation our property market was in, having languished in the doldrums for far too long.
As this current frenzy still fizzles along, it’s easy to forget the many long years we NSW property owners held onto assets, which limped along. In all likelihood, if in 2023 we take a measure of the previous 10 years of Sydney property growth we are likely to find a stable, average result, not unlike most property markets. The point here is that every market has its day, and Sydney’s is behind it for now.
Put a ring on it
So where to next? Many pundits are betting on the ripple effect and to be honest, this can sometimes occur. Find the hot market now and draw a ring around it, and you might just uncover the next hot market before anyone else does. The poorer cousins of property – those areas aligning the more favoured ones typically do well once the more affluent areas increase out of the price range of most, and many a past investor has enjoyed success with his method.
I’m personally betting on some of the country’s fresh new, emerging markets as solid places to invest. If we remember that most property investors are in this game to create a better retirement for themselves (rather than speculate with a short term ‘buy to sell for quick profits’ strategy), then it’s easy to see why markets with the capacity to experience ‘generational’ growth are those where our best bets lie.
By generational growth, I mean the kind of growth which happens year-in, year-out for an entire generation. Rather than see a sudden boom that is short-lived and requires precise timing to benefit from, areas with this generational growth have more predictable, smoother and more consistent returns. In a nutshell, they grow most years, by enough to compound into a nice little overall return at the end of the investment period.
The next big thing
In this coming year, I think investors must be aware of the potential changing needs of the population. Flexible work options, technology advances and changes to how consumers spend, combined with the entry to the market of Generation Y buyers (who think of themselves and their kids first, and work last) will mean that the choices made by property buyers and renters will fundamentally begin to change. Properties will be chosen for the lifestyle benefits first, and for access to work last. Therefore, the kinds of areas most likely to begin their rise to popularity will be those offering lifestyle. Add to this the fact that Generation Y parents look for amenities to suit their children’s own many lifestyle pursuits, and we can see a pattern emerging as to the kinds of areas which will attract the most buyers.
This means suburbs, and those large, well-serviced regional areas with populations booming in the family demographic. It means areas with sporting facilities, private schools and cultural hubs, where the fancy of every family member can be satisfied. It also means areas with suitable transport nodes and accessibility, so that those who still need to commute, can.
The ‘burbs to bet on
North eastern Brisbane is alive with these kinds of areas – Moreton Bay shire with its eastern seaboard suburbs being a great example – Strathpine, Clontarf, Redcliffe and Deception Bay to name a few. Move south to the Middle Ring of Brisbane to find Upper Mount Gravatt, Holland Park and Greenslopes, or further south to Ipswich, a thriving town known as the friendliest place in Australia!
Quietly sneaking up on us are the seaside suburbs of South Adelaide – Seaford, Port Noarlunga and Aldinga Beach – well serviced and thriving with a committed council.
And finally, Toowoomba – the recipient of significant infrastructure and the bottom of the Surat Basin, where mining influences impact but don’t govern how well this inland city will perform.
Stick with areas like these for the long term and you can’t help but see some solid performances with the endurance to last.
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