Together with Momentum Media’s James Mitchell, Smart Property Investment’s Phil Tarrant and Sasha Karen look back on property hotspots cited by experts in 2018 and analyse their potential for continuous growth this new year:
Located in the City of Liverpool, approximately 25 miles west of the Sydney CBD, Badgerys Creek has caught the attention of property experts and investors for the investment opportunities brought about by future major infrastructure projects in the suburb.
For one, Badgerys Creek is the site of the new Western Sydney Airport, which is expected to be complete by 2026.
Moreover, the ‘Badgerys Creek Aerotropolis’, a ‘global city’ located south of the airport, will also bring more opportunities into Western Sydney.
According to Starr Partners’ Doug Driscoll last April 2018: “There are not many places, anywhere in the country, growing as fast as the south-west corridor of Sydney, and clearly demand for property will increase due to more jobs coming to the area."
Moving forward to 2019, these infrastructure projects will spur population growth and jobs growth, ultimately allowing the Sydney property market to improve.
“We've got the Western Sydney Airport and the Aerotropolis being under construction, so there's going to be a tonne of employment related to that. I think it was about 200,000 jobs for the whole Aerotropolis alone,” Mr Karen said.
Mr Tarrant highlighted: “I was reading the paper just before Christmas and there was a piece in there talking about the train line from St. Marys out to the new Badgerys Creek Airport, essentially linking up the Greater Western Sydney.”
Holding a property in, Mr Tarrant remains confident that his investment will yield positive results in the near future.
“We invested in it quite a number of years ago, but it goes to show that hotspots sometimes take time to mature. When we bought in Badgerys Creek back then, the suburb still hasn't been formally gazetted as what is happening now. It was still in a condition that's been happening for 50 years. Now, it’s Badgerys Creek, hotspot.”
“I'm not gonna disagree with that because it's not my job to confirm or deny hotspot predictions, but it makes sense because it draws on the basis of property fundamentals which influence markets, including infrastructure, jobs and population growth, transport.”
“All these things go hand-in-hand to put positive pressure on property, particularly in terms of capital growth,” according to the property investor.
Like Badgerys Creek, Miller is also located in the City of Liverpool, approximately 24 miles away from the Sydney CBD.
Mr Driscoll cited the suburb as the ‘next St Marys’ as Miller follows the same growth pattern seen by St Marys two to three years ago.
The property expert said prior to the beginning of 2018: “I think Miller is one of the last ungentrified suburbs in Sydney, similar to St Marys a few years ago and Riverstone before it was rezoned.”
“The median house price in the suburb is less than the neighbouring suburb of Hinchinbrook, and I think it represents phenomenal value. The area is relatively unknown, but it will start to become more gentrified as more development approvals are accepted, from high-rise apartments and townhouses.”
Miller lies at the edge of Sydney, allowing investors to enjoy relatively affordable house prices without being too far away from the benefits of city life.
However, the possibility of growth in the suburb may not be as phenomenal as investors would want.
“It’s going to be to St. Marys' progress, and there’s the simple things like getting a Coles or a Woolworths. It's really those core amenities that could help any hotspot,” Mr Karen highlighted.
As Sydney and Melbourne started to soften after an unprecedented property boom, Tasmania’s capital city Hobart emerged as one of the most impressive property hotspots in Australia.
In fact, Propertyology’s Simon Pressley said back in 2017 that Hobart could be the next Sydney in terms of property market growth. This was further supported by the fact that Tasmania has slowly emerged as one of the biggest economies in Australia since 2014, even after experiencing a state recession.
“Hobart is the only location in Australia which has the combination of an affordable entry price, an economy which is already strong (and still improving), hardly any impact on investor’s annual cash flow and a tight supply pipeline for as far as the eye can see.”
Fast forward to 2018, the capital city definitely provided great returns to investors.
However, 2019 may not yield the same good results like the past two years, according to Mr Pressley. After all, while a flat market benefits the buyer, a hot market benefits only those already in the market.
“It is hotter now than what it has ever been. That is really exciting and, I'd say, rare for property investors. The economy is really solid. There's a lot of really exciting infrastructure projects there. Agriculture's going crazy, tourism's going crazy. International student market is really, really big.”
“Now, every market will come to an end at some point, but we can't see the end of Hobart yet. It will be out there somewhere, but it certainly won't be 2018,” according to the buyer’s agent.
Moving forward, while Hobart remains a hotspot due to several growth drivers still present in the market, investors are advised to be cautious and take their time to research the capital city’s property market as well as its local economy.
By 2020, Mr Pressley believes that growth in Hobart may start to slow down.
At the end of the day, while ‘hotspot headlines’ can definitely provide an overview of what’s going on in the property market, Mr Tarrant strongly encouraged his fellow investors to do their own research and ultimately decide based on their personal and financial goals and circumstance.
“If people are already talking about hotspots, you probably already missed it. It's about finding that hotspot before anyone else has because the hotspots that no one tells you about are the true hotspots.”
The property investor also recommended working with property professionals, where appropriate, to maximise the opportunities present in the market.
“Often, the only way to actually get access to these pre-hotspot markets or, at least, gain an understanding of where those hotspots are is through a buyer's agent,” Mr Tarrant said.
“They do this thing for a living every day—picking through data and all these different moving parts to get a really good read on where you should be investing. If you're not using a buyer's agent, maybe you should start. But if you got the capability to do all that research yourself, go for it.”
Tune in to Smart Property Investment's Hotspots 2019 episode to find out how you can best utilise the outcomes of 2018 to identify the investment hotspots for the year ahead.