Invest
Regional centres, smaller capitals picked for ‘modest gains’ in 2019
Investors have been encouraged to look outside the major markets in 2019, with opportunities present in regional centres and smaller capital cities.
Regional centres, smaller capitals picked for ‘modest gains’ in 2019
Investors have been encouraged to look outside the major markets in 2019, with opportunities present in regional centres and smaller capital cities.
Shane Oliver, chief economist at AMP Capital, has urged investors not to consider current price falls across Sydney and Melbourne as indicative of housing bust.
In his latest analysis, he recommended Australian investors broaden their horizons and look for opportunities in other housing markets this year.
“Other cities and regional centres offer more attractive rental yields than Sydney and Melbourne, and falling prices in Sydney and Melbourne will throw up opportunities at some point,” he said.
Mr Oliver said whilst Sydney and Melbourne remain at risk, with his revised outlook predicting a potential 25 per cent drop in prices to 2020, other cities have not experienced the level of boom enjoyed by the major capitals and therefore are unlikely to crash.
“While prices in other cities are being affected by credit tightening, they were less speculative and so are less vulnerable,” he said.
“Perth and Darwin have already seen prices fall back to decade-ago levels. Other capital cities and regional centres generally didn’t have a boom and so are unlikely to have a bust.
“[For] the rest of Australia, flat prices to modest gains are likely.”
Mr Oliver said the broader outlook suggests an Australiawide housing crash is unlikely, as market fundamentals remain strong.
“Bust is unlikely unless we see much higher interest rates or unemployment – neither of which are expected – driving a sharp rise in defaults and forced property sales or a collapse in immigration, which would collapse demand,” he explained.
“Strong population growth is still driving strong underlying demand for housing.
“While mortgage stress is a risk, it tends to be overstated and is unlikely to be a generalised issue unless interest rates or unemployment shoot higher.”
Mr Oliver encouraged investors to consider their property interests as long-term investments, which still offer value as a source of diversification in portfolios.
“Over the very long term, residential property adjusted for costs has similar returns to Australian shares. So, there is a role for it in investors’ portfolios,” he concluded.
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
