Our 2018 Forecasts Hit The Mark

Posted on 1/01/2019  
Our 2018 Forecasts Hit The Mark

Hotspotting’s broad predictions for real estate markets across Australia in 2018 have been proven to be generally on the mark.

The core elements of our forecasts at the start of 2018 – continuing wind-down in Sydney and Melbourne markets but good price performance in the smaller capital cities and in key regional centres – have been borne out by the year’s outcomes.

At the start of 2018, Hotspotting founder Terry Ryder wrote a three-page feature for Money Magazine predicting outcomes in real estate markets across Australia for the year ahead. This was the Cover Story for the magazine’s February 2018 edition.

In the main article, he wrote: “The secret to profiting from real estate will lie in understanding that Australia has many different property markets – and some of them will be rising strongly in 2018, even as the most high-profile ones are fading.”

As we expected, many of the Sydney and Melbourne markets went into decline, but other capital cities showed good growth, including Hobart and Canberra. Moderate increases were recorded in Adelaide and Brisbane, while Perth showed the first signs of recovery from its post-resources-boom slump.

Ryder also predicted that “key regional cities will be among the strongest of the nation’s growth markets”. He suggested that markets to watch in 2018 would include the Hunter Region in NSW, Ballarat and Pakenham in Victoria, and the Sunshine Coast in Queensland.

As forecast, the highest price growth in 2018 was recorded in regional centres, led by regional Victoria and regional Tasmania, including some locations where median prices rose more than 20%. Key regional cities of NSW and Queensland also delivered good price growth.

The article suggested that Melbourne would “show increasing signs of slow-down, with most of the stand-out growth markets being the affordable outer-ring suburbs or regional towns not far from the city.”

While the overall median house price for Melbourne decreased during 2018, as predicted, some market sectors continued to deliver solid growth, notably the outer-ring local government areas like Hume and Whittlesea in the north, Casey in the far south-east and both Melton and Wyndham in the west. Some suburbs grew 20%-plus in 2018.

A year ago Ryder predicted that Perth, after four years of decline, would “show the first price growth since 2013.”

Perth’s vacancy rate steadily declined and reiwa.com recorded a return to growth in the city’s median house price in October and November. SQM Research data also indicated that recovery was under way in Perth. Notably, many of the million-dollar suburbs of Perth recorded strong growth.

Another of Ryder’s predictions was recovery in prices in resources-related towns. At the start of 2018 he wrote that towns “which have suffered major price decline since the end of the mining investment boom, will start to show price growth again.”

Median prices started to rise in WA resources towns such as Port Hedland and Karratha, as well as Queensland centres like Mackay, Emerald and Moranbah.

These are all places where prices fell massively over the past 3-4 years and they have a long way to go to reach the former peak levels.

FOOTNOTE: Keep an eye out for the upcoming February edition of Money Magazine, in which Terry Ryder will once again make his predictions for the year ahead.

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