Predicted Locations to Buy Property in Australia 2019

October 29th, 2018

Whether it’s your dream home or an addition to your growing investment portfolio, it always pays to do your research before buying property. Choosing the right piece of real estate involves using your head rather than your heart and looking for property that will return solid capital growth and/or rental yields.

So where are the best areas to buy property in Australia today? As a follow up from our 2017 and 2018 predictions, the following are some of the areas experts expect big things from in 2019.

Want to know our predictions for 2020? We’ve just revealed them

General outlook

As forecast by most experts, the property boom has come to an end and the market is now in the doldrums.  Slower growth is being experienced in the major areas, and values are actually falling in others.

Tighter lending restrictions (including a crackdown by APRA on interest-only loans) has contributed to the slowdown, especially in Sydney and Melbourne, with investors finding it much harder to get finance as the banks tighten their belts.

And with an oversupply of homes following recent record levels of dwelling construction (including a glut of CBD apartments in a number of cities such as Perth, Brisbane and Canberra), the building industry is now also experiencing a slowdown.

But according to ANZ economists, rather than continuing to slow in 2019, house prices will enjoy modest growth of up to 3.6% during the coming year, with Melbourne, Hobart and Brisbane all expected to perform well.

Senior ANZ economists Daniel Gradwell and Joanne Masters believe that most of the predicted price growth adjustment has already occurred and that a stronger labour market and increasing incomes will drive price growth going forward.

And indeed, the BIS Oxford Economics Residential Property Prospects 2018-2021 report predicts all capital cities to turn around and show positive growth over the next 3 years,

A resurgence in first home buyers is also forecast, taking up the slack left by property investors unable to obtain finance due to the new APRA restrictions. With no immediate interest rate hike on the horizon and government grants and stamp duty concessions in NSW and Victoria, first home buyers are re-entering the market and will contribute towards the modest growth predicted over the next few years.

Victoria

So what’s the outlook for Victoria in general and for Melbourne in particular? According to the BIS Oxford Economics report, Melbourne house prices are predicted to grow by 6% over the next three years. This is being fuelled largely by record population growth, which is higher in Victoria than in any other state and which is expected to see Melbourne become the largest city in Australia by 2031.

But while house prices are forecast to achieve modest growth over the next three years, unit prices are expected to fall by 2% during the same period.

So which are the best Melbourne suburbs to look at in 2019? According to CoreLogic’s new Top Performing Suburbs report, Victoria’s Top 20 most consistent growth suburbs are Wallan, Hastings, Cockatoo, Coolaroo, Melton, Crib Point, Rosebud, Box Hill, Dallas, Melton South, Springvale, Ardeer, Safety Beach, Darley, Bacchus Marsh, Balwyn North, Broadford, Hallam, Capel Sound and Kurunjang.

South Australia

While South Australia’s economic environment is expected to remain subdued in the short term, due to the closure of its automotive manufacturing industry, the BIS Oxford Economics report predicts modest growth in SA house prices over the next few years.

They are expected to grow by 9% by 2021, boosted largely by interstate migration for Adelaide’s burgeoning shipbuilding industry. A reduction in land tax by the South Australian government is also expected to be well received by home buyers and property investors.

According to NAB’s most recent Residential Property Survey, Adelaide house prices are predicted to increase by 1.7% in 2019 which, while modest, is well ahead of the combined forecast average for all capital cities, which is a decrease of 0.1%.

So which are the best South Australian suburbs to look at in 2019? According to CoreLogic’s report, Adelaide suburbs that have experienced the highest growth in the past 12 months include Glenelg South, Royston Park, Hazelwood Park, Kensington Gardens, Kensington Park, Woodville, Gilberton, Trinity Gardens, Stonyfell and Dulwich.

Elsewhere in Australia

As for the rest of the country, growth over the next few years will be mixed. Sydney prices are predicted to rise by just 3% by 2021, which is the slowest growth rate of any Australian capital city. With the top and bottom ends of the market both suffering, those looking to buy property in Sydney may have to look somewhere in the middle to find value.

According to the BIS Oxford report, Brisbane is predicted to see the strongest growth of all capital cities over the next three years, with a rise of 13%. This will largely be due to strong population growth from international and interstate migration and also because of Brisbane’s comparative affordability.

Canberra will see strong growth of 10% by 2021 and Perth is expected to grow by the same amount, after finally coming out of a four-year post-mining slump. Hobart will grow by 8%, which is considerable given the small size of the market, while Darwin is expected to grow by a modest 5% as the market slowly recovers after peaking in 2014 and then nose diving by 19%.

The take out

Whether you’re buying property to live in or for your investment portfolio, there is a lot of value to be found in Victoria, South Australia and other areas of the country. The key to finding them is to do your research, including reading and comparing as many predictive articles such as this as you can find (while understanding no one can predict the future).

And wherever you end up looking, if you keep in mind the basic requirements which dictate whether an area is likely to grow, such as transport, employment and amenities, you are more likely to succeed in your search for property with the best yield and/or capital-growth prospects.