As the Sydney and Melbourne markets wind back from their recent peaks, property investors are looking for the next locations that will provide strong capital growth and good rental returns.
Population trends and economic data are good indicators of prospective property growth within a state/region and these are now favouring South Australia, Queensland and Western Australia. All three states are showing considerable promise economically with the revival of the resources sector and major infrastructure projects in the pipeline.
Within each city there are particular areas ripe for forward-thinking investors.
Below are my picks for investment opportunities in each city:
I rate the middle-market precinct of Marion because of its long-term resilience and more recently because of the number of growth suburbs in this local government area, which have grown in each of the past four quarters. Marion, south-west of the Adelaide CBD, ranks as the no. 1 market in the Adelaide metropolitan area and one of the strongest in the nation.
The city of Marion offers affordable properties as well as low vacancies. A number of suburbs — including Glandore, Hallett Cove, Marion and South Plympton — have shown good growth in median prices in the past year, with more expected in the near future. Long-term capital growth rates have been solid.
Playford LGA is the fastest-growing local government area in South Australia and has one of Adelaide’s most active property markets. It is characterised by affordable housing, low vacancy rates and high rental yields. Suburbs such as Elizabeth Park, Craigmore and Munno Para West have median house prices below $300,000.
The property market is underpinned by the region’s strong industrial sector, its status as Adelaide’s leading sector for transport and logistics, and the presence of many significant jobs nodes, including the vast Edinburgh Defence facility.
The city of Onkaparinga, in the south the Adelaide metro area, is a location worth considering by property buyers. It has a track record of steady price growth and above-average rental yields in one of South Australia’s strongest population growth areas.
Over the next 20 years, the region is expected to receive an influx of 48,000 additional residents, making it one of Adelaide’s strongest growth areas. The LGA includes beach suburbs like Aldinga Beach, a renowned wine district and new growth areas.and
The development of large tracts of vacant land and strong population growth have led to Ipswich being named one of the fastest-growing real estate markets in Australia. This development activity is being accompanied by major spending on infrastructure and property investment.
A feature of the growth of Ipswich City is the number of major national companies and government departments which have moved into the area in recent years. This has created major jobs nodes, which continue to grow. Ipswich City has many of the most affordable suburbs in the Brisbane metropolitan area, some with median prices in the $200,000s.
The sales volumes in the suburbs of the Moreton Bay region show the importance of affordability in residential real estate. Five of the core suburbs of this region have each sold over 400 houses in the past 12 months. Three of the five have median house prices below $390,000.
The Moreton Bay region, offers affordable housing as well as good rail and road links to Brisbane to the south and theCoast (and beyond) to the north. Currently this market is the most active in the Brisbane metropolitan area and likely to deliver good price growth in the near future. A new university campus will bring new economic activity and demand for real estate.
The Redcliffe Peninsula finally has the transport link that it’s been promised for decades. The Moreton Bay Rail Link provides a rail connection from Kippa-Ring to Petrie and onward to the Brisbane CBD.
Consequently, the market is responding, with some suburbs delivering strong price growth in the past year. Many of the Peninsula’s suburbs have median house prices in the $400,000s.
The Joondalup precinct is one of Perth’s steadiest property markets, with consistent sales activity at a time when the Perth market generally has been in decline.
Now the Perth market is showing signs of revival, with the Joondalup precinct at the forefront of the recovery. It has several growth suburbs which offer the opportunity to buy well ahead of future price rises. A key feature is the Joondalup CBD, with a strong array of education, medical, transport and commercial infrastructure.
Suburbs in the city of Melville – which include Bicton, Booragoon, Kardinya and Leeming, straddle the inner-city and middle-ring areas of Perth. They benefit from being close to the major east-west transport corridor linking the Perth Airport to the Port of Fremantle. They also have good access to the Perth CBD.
The strong level of infrastructure spending targeted on the Melville precinct suggests this market is well-placed to return to growth as Perth enters the recovery phase. It includes the Murdoch University and the new Fiona Stanley Hospital.
The Stirling LGA is one of Perth’s metropolitan areas leading the recovery in the Perth property market.
Properties across this precinct maintained a steadier performance than most Perth locations throughout the recent economic downturn — and now many of its suburbs have rising markets while others stand out for their consistent sales performance.