Finding tomorrow’s hot property, TODAY

It Pays Not To Generalise

The greatest source of misinformation about real estate – and the scourge of consumers trying to figure out what’s happening in markets across Australia – is generalisation.

And by that I mean, economists and other commentators speaking about Australia as a single market or about a major city as if there is just one scenario happening across the entire metropolitan area.

The Spring edition of The Price Predictor Index depicts a number of important instances where it pays NOT to generalise – because there are markets within markets.

The Sydney property market – overall – has now dropped well below its peak. In fact, it’s been in decline since the middle of 2021, with a notable slump in sales activity in the March Quarter of this year, well ahead of the interest rate rises.

The New South Wales economy has taken a battering in the past 12 months, with it now ranking in 7th position in the State of the States Report published quarterly by CommSec – that’s second last among the states and territories, in terms of its economy.

That’s a big change of fortunes for Sydney and NSW, which normally sits in first or second position in terms of economic performance.

So, the Sydney market overall has dropped – BUT there are still growth markets within the Greater Sydney area.

The more affordable middle market areas still have good sales activity and prices remain solid.

Precincts which offer houses in the $900,000 to $1.5 million price range are still popular with buyers.

That includes LGAs such as Canterbury-Bankstown, Parramatta, Georges River, Cumberland and Fairfield.

The search, by buyers, for more affordable options has also resulted in an increase in apartment sales within Sydney.

Areas where typical houses might cost $2 million but apartments are typically $600,000 or $700,000 are becoming increasingly popular with buyers.

At the same time, the regional New South Wales market – overall – has experienced a drop in sales after peaking in mid-2021.

The places that led the previous up-cycle – like Byron Bay and the Central Coast – are no longer booming.

But there are many exceptions – regional centres where sales activity is still rising and prices are solid.

Tamworth is an example – it’s a standout performer with transaction levels lifting – and in nearby Armidale it’s a similar scenario.

While Newcastle is not performing as strongly as it did before, the nearby Port Stephens area is continuing to attract strong buyer demand.

Indeed, throughout regional NSW there are numerous small to medium sized regional centres with busy markets and rising prices.

Another example of why it pays not to generalise – a place where there are markets within markets – is the Sunshine Coast in Queensland.

The Sunshine Coast has been a national leader on price growth for at least three years. Its boom pre-dated the national boom, driven by a huge local infrastructure construction program.

But much of the heat has come out of the Sunshine Coast, with sales activity fading, quarter by quarter, over the past 12 months.

There are now only seven suburbs in the Sunshine Coast region which we classify as rising markets.

But they’re all in a cluster in the south of the coastal strip – around Caloundra.

Yes, there are only seven suburbs with rising sales activity among the 53 suburbs within the Sunshine Coast and Noosa regions combined – and all sit within that more affordable Caloundra area.

Caloundra West, Currimundi, Aroona, Moffat Beach, Golden Beach and Pelican Waters all still have rising sales momentum.

Generally speaking, they’re half the price the Noosa precinct in the north of the Sunshine Coast seaside strip.

And that may explain while buyer demand there is still very strong.

It’s emphasises the point that, if you want to be successful in property investment, you need to tune out the media white noise, ignore the generalised commentary, and seek out those areas which are continuing to out-perform.


Subscribe to our newsletter today and receive a FREE copy of How To Identify Hotspots