The general consensus among many experts and industry watchers is that, compared with the past two years, 2016 will see slower or flat property value growth around the country as investor activity cools and unaffordability subsides, particularly in the larger markets.
But that’s not to say there still won’t be suburbs and regions that are likely to enjoy healthy capital growth over the next 12 months.
Terry Ryder, founder and director of hotspotting.com.au, says that when it comes to smart property investing, “always follow the infrastructure trail – where are the big-scale transport corridors, schools or hospitals, for example, being built?
“Look for outer areas well connected by road and rail that are still relatively affordable,” he says.
We asked Ryder to share some of his property 2016 hotspot predictions for the five biggest mainland capital cities.
One part of Sydney on Ryder’s radar is the City of Liverpool local government area (LGA), which includes the suburbs of Liverpool, Chipping Norton, Casula and Moorebank among others.
Liverpool LGA is home to what may be the single largest infrastructure project in Australia’s history when completed – the Western Sydney Airport at Badgerys Creek.
Work on the airport site could commence as early as next year, with air traffic predicted to be operating by the mid-2020s. A rail corridor and station for the airport are both being planned, while work has already begun on nearby road upgrades.
Also in Liverpool LGA is the suburb of Hammondville.
CoreLogic RP Data ranks every suburb in every Australian LGAs according to its likelihood of experiencing positive capital growth in the future. Hammondville ranks equal third out of all suburbs for predicted house price growth.
As well as the Liverpool LGA, Ryder also recommends the suburb of Westmead. Two major infrastructure projects were announced for this suburb earlier this month: a $900m redevelopment of Westmead Hospital, with first works already underway on site, and a 22km light rail corridor to run from Westmead through Parramatta and Sydney Olympic Park to Strathfield.
“Westmead was already tracking well even before these projects were announced,” says Ryder. “There’s good medical and education industry in the area, which means jobs and therefore a reason for plenty of people to want to live around there.”
CoreLogic ranks Westmead as equal-second among all Australian suburbs for likely future capital growth – higher even than Hammondville.
Despite seeing an undeniable slowdown, Melbourne doesn’t seem to be hitting the brakes as hard as Sydney. Property value growth is slowing and auction clearance rates are dropping in the Victorian capital, but not at the same rate.
“Melbourne’s inner-city value growth has been rippling to the outer regions,” says Ryder. He specifies the Whittlesea LGA as a likely hotspot for 2016, singling out in particular the suburb of Epping, about 22km north of the CBD.
“The fruit and veg markets up there are good for jobs and we’ve seen a big upturn in sales activity there”, he says.
Indeed, more than 400 houses sold in the suburb alone in the 12 months to November, according to CoreLogic.
Ryder also highlights Brimbank LGA west of Melbourne. This includes the suburbs of Sunshine, Sunshine North and Sunshine West, along with St Albans and Deer Park.
“Brimbank is still affordable, has major infrastructure in place and is seeing some good urban renewal,” says Ryder.
The signs look good for the Brisbane property market in 2016. And according to Ryder, “a lot of the momentum is on the southern side”.
The Logan LGA includes Logan Central, Loganlea and Yarrabilba. Ryder argues the area ticks all relevant infrastructure and transport boxes needed for likely capital growth and is a convenient mid-point between Brisbane and the Gold Coast – both of which are seeing some of the country’s biggest population booms.
Another of Ryder’s Brisbane recommendations is the Redcliffe Peninsula, which includes the suburbs of Redcliffe, Clontarf and Woody Point.
Earlier last year, major earthworks finally began on the long-delayed Moreton Bay Rail Link, a 12.5km long dual-track heavy gauge rail link that will connect Petrie to Kippa-Ring with stations at Kallangur and Mango Hill among others. It’s due for completion later next year.
“The Redcliffe Peninsula has always been appealing for lifestyle reasons, and now it’s also appealing to investors,” says Ryder.
Population growth in the Moreton Bay region is also encouraging. According to the Queensland government more than 375,000 people call it home, and that figure is set to exceed 500,000 over the next 15 years.
The City of Churches has struggled this year with the highest unemployment rate of any capital. Yet CoreLogic RP Data reports its property market has still seen solid, if unremarkable, value growth of 3.3%.
“For a small city that’s struggling a bit economically, there’s a surprisingly large infrastructure spend going on there,” Ryder says.
This includes the Riverbank Precinct redevelopment along the Torrens as well as the new $2.1bn Royal Adelaide Hospital – rated by Emporis as the third-most expensive single building in the world ever built. The hospital is set to be completed by the middle of next year.
“We see opportunities in the middle and cheaper parts of the Adelaide market,” Ryder says.
He cites the West Torrens LGA, which includes, Thebarton, Torrensville and Fulham. It’s also home to the city-fringe suburb of Mile End, which CoreLogic ranks fourth of all SA suburbs for likely positive capital growth.
South of the city, Ryder recommends the Onkaparinga LGA, which includes the famous McLaren Vale wine region as well as the picturesque coastal suburbs of Sellicks Beach and Port Willunga.
Onkaparinga also contains Seaford, the new terminus suburb of Adelaide’s southern metropolitan railway line which was extended from Noarlunga Centre in early 2014.
“As well as having an extended train line and beautiful wine region, Onkaparinga is also seeing decent population growth,” says Ryder.
Only Darwin has had a worse year than Perth for property prices, with dwelling values in both capitals falling by more than 4% year-on-year to November according to CoreLogic.
“Perth is definitely a buyer’s market right now and that’s usually the best time to snap up a bargain,” Ryder says.
On his radar is Rockingham LGA, which includes Rockingham, Cooloongup, Baldivis and Secret Harbour. “It’s got high levels of affordability, jobs and population growth,” he argues.
East of Perth, Ryder highlights the suburb of Forrestfield, next to Perth Airport. Construction will begin next year on a new $2bn rail line, due for completion in 2020, that will link Forrestfield to Bayswater and Perth’s broader metro rail network via the airport, around which Ryder says are “big masses of employment precincts”.
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