2016 growth locations revealed

By Vivienne Kelly 04 November 2015 | 1 minute read

Two unexpected regions are set to emerge as price growth leaders next year, as investors look beyond Sydney, Melbourne and Brisbane.

Newcastle, approximately 160 kilometres north of Sydney, has lagged the NSW capital in terms of price growth and is set for a significant turnaround, according to managing director of BIS Shrapnel Robert Mellor.

Mr Mellor said the Newcastle region had recovered from mining-related slowdowns and company closures of the past decade and was now in “reasonable shape”.

Newcastle will also benefit from the flow-on effects from Sydney’s recent and ongoing price surge, he said. In addition, the region will attract retirees and downsizers “trading out of the Sydney market”.

BIS Shrapnel forecasts put Newcastle’s growth over the three years to 2017-18 at 15 per cent – compared to Sydney’s two per cent.

“The Sydney figure doesn’t look particularly spectacular,” he explained. “That’s because there’s growth in the first year [2016] and then some small declines as you’ll see investors being more cautious and exiting the market.”

Mr Mellor said Sydney was moving into “over-value territory” so it is due for a slowdown.

The other region set to outperform in the coming years is the Gold Coast – with aggregate growth over the next three years forecast a 14 per cent, according to Mr Mellor and BIS Shrapnel.

“[The Gold and SunshineSunshine, NSW Sunshine, VIC Coasts] have been very subdued and again the underlying fundamentals of undersupply have started to catch up there and that will drive stronger price growth,” he said.

“In fact, if I was an investor I’d be more likely to want to buy in the Gold Coast or Sunshine Coast than I would in inner Brisbane.”

Mr Mellor said investors would increasingly scout out these alternatives as Sydney reaches the “limit” of its price growth and affordability, and Brisbane looks down the barrel of oversupply.

“Our real big concern at the moment and the one that we’ve really highlighted over the last few months is this turnaround in Brisbane because there has just been so much supply coming through in apartments,” he said.

“We always knew about [oversupply in] Melbourne and this is going to start to bite as we move into 2016 and 2017. The question is then, how big will the decline be in prices?

“If we don’t see construction ease back in the next 12 to 18 months [in Brisbane], then the decline will probably be bigger than we’re forecasting in apartment prices in 2018 and even through to 2019.”

Mr Mellor said the lower Australian dollar, tourism increases, infrastructure investment and the 2018 Commonwealth Games would help to solidify the Gold Coast’s property market.

Read more: 

Suburbs experiencing huge rental increases 

Sun to set on development loophole 

Private landlord given expensive lesson

When, not if 

Are you too old to invest in property? 





An investment is an asset or item purchased with the expectation that it will generate income or appreciate in value in the future.

2016 growth locations revealed
spi logo

Get the latest news & updates

Join a community of over 100,000 property investors.

Check this box to receive podcast updates

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.