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The housing markets tipped for biggest improvements in 2019

By Stephanie Aikins · January 25 2019
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Invest

The housing markets tipped for biggest improvements in 2019

By Stephanie Aikins
January 25 2019
Reading:
egg
egg
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Burnie Tasmania

The housing markets tipped for biggest improvements in 2019

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By Stephanie Aikins · January 25 2019
Reading:
egg
egg
egg
Burnie Tasmania

While growth may be stunted in many markets throughout 2019, investors have been encouraged to look for specific regions that are likely to see improvement over the year and into the future.

According to Simon Pressley, market analyst and director of buyer’s agents Propertyology, investors should focus on seeking out markets that project signs of improvement moving forward, as capital gains are likely to be restricted in 2019.  

“That’s not to say that every market is really hot now, but I’m talking about what’s the outlook for the next few years. It’s the complete opposite in the rest of Australia to those conditions we’re seeing in Sydney, Melbourne and Darwin,” he told Nest Egg recently.

Mr Pressley said developments in a range of industries across regional centres will likely spark significant progress in smaller housing markets over the next few years.

“Most locations outside of our eight capital cities are already strong and, in a lot of cases, strengthening further,” he said.

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“In the majority of cases, the primary driver was related to economic development activities from prior years that is now starting to produce tangible benefits for these communities.”

Such towns and cities offer unique opportunities to the savvy property investor, as there exist prospects to jump into the market ahead of potential booms.

Here are Mr Pressley’s top picks per state for the housing markets likely to improve the most in 2019.

New South Wales: Parkes

Median house price: $250,000

As the mining and science centre has only experienced an 11.1 per cent increase in house prices over the last 5 years, Mr Pressley suggested its growth cycle is well overdue.

Indeed, he said the growth period may already have begun as of late-2018.

“Vacancy rates have been declining and currently sit at 1.1 per cent, plus there was an 18.4 per cent rise in house sales over the year ending October 2018,” Mr Pressley said.

“Construction is currently underway for a transport logistics hub in Parkes that will form part of the federal government’s $10 billion Melbourne-Brisbane Inland Rail Project.”

Queensland: Mount Isa

Median house price: $255,000

Although the economy lacks diversity, with one in three people in Mount Isa employed in the mining sector, Mr Pressley believes the region is likely entering a period of booming growth as the world demand for mining commodities continues to rise and a new mining cycle is underway.

As a result, the productivity of local mines has substantially increased and exploration of new mines in the area is on the rise.

“Consequently, properties in Mount Isa sold much quicker over the last 12 months (38 days on average, compared to 77 days in the year prior) and vacancy rates tightened over the year from 3.1 per cent to 2.1 per cent,” Mr Pressley said.

“The increased buyer activity will result in significantly fewer dwellings to choose from, with listing volumes as of October 2018 9.2 per cent lower than a year earlier.”

South Australia: Whyalla

Median house price: $150,000

Since UK billionaire Sanjeev Gupta purchased Arium’s steel factory in late 2017, Whyalla is now set to experience an injection of billions of dollars to develop the world’s best steel plant, a renewable energy project, a large horticultural facility and a major hotel.

According to Mr Pressley, the billionaire’s investment in the area has the community of South Australia’s third-biggest city now projecting a quadrupling of the population in the next 10–12 years.

“Whyalla’s property market shed more than 30 per cent over the last five years and, while it fell again last year, I wouldn’t be surprised if it produces one of Australia’s biggest turnarounds in 2019,” Mr Pressley said.

“Vacancy rates were off the charts a few years back, but they’ve fallen sharply of late (currently 2.9 per cent) and houses are selling quicker.”

Tasmania: Burnie

Median house price: $240,000

Home to Tasmania’s most productive port and the centre of a diverse range of industries, including manufacturing, tourism, agriculture and mining, Mr Pressley believes Burnie’s property market will experience significant improvement in 2019.

He referred to the town as a “mini capital city” as it operates as a key service centre for much of Tasmania’s north-west region.

“The local tourism trade (including cruise ship volumes) keeps strengthening, construction of a new university will get underway this year, commencement of the development of a new timber mill is imminent, and local mines are employing,” Mr Pressley said.

“2018 produced a 6 per cent increase in house sales and supply is tight.”

Victoria: Bairnsdale

Median house price: $300,000

Mr Pressley pointed to the overflow of Melbourne’s population and the city’s housing affordability issue as a key factor likely to inspire market growth in nearby Bairnsdale.

The town is known for its picturesque surrounds, quality cuisine and strong health care sector, attributes likely to attract population growth.

“Vacancy rates are already sub 1 per cent, the region produced a 10 per cent increase in house sales volumes last year and they are selling quicker,” Mr Pressley said.

Western Australia: Bunbury

Median house price: $300,000

With its workforce employed in a range of different sectors, from construction to agriculture, mining and forestry, Mr Pressley believes this port city is set to benefit significantly from the worldwide battery boom.  

“Other than the 3 per cent increase in house sales volumes last year, property-specific metrics do little to inspire confidence in Bunbury,” he admitted.

“[However,] US resources giant Albemarle is due to begin construction of a $1 billion lithium processing plant in early 2019, creating an estimated 500 jobs.

“Lithium will be transported from the region’s Greenbushes mine, also undergoing a $1 billion expansion,” he concluded.

The housing markets tipped for biggest improvements in 2019
Burnie Tasmania
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