Hi Guys
Comment on the Australian property market from IPR's newsletter.
Regards
Comment on the Australian property market from IPR's newsletter.
Australian Market
Much has been written of the overall Australian Market at present but as stated a number of times previously, it is a much larger market than the New Zealand market and has to be analysed on a region-by-region basis to avoid the overriding influence of Sydney.
Sydney
As predicted by us over the last 2 – 3 years, the impact of building at rates well above population growth rates has finally caught up with the over-valued Sydney market and it has been correcting now for the last 12 months. As further correction is likely over the next 12 months, Sydney is not recommended.
Other NSW Regions
The Central Coast (north of Sydney) and the South Coast (south of Sydney) have both been extremely good areas to invest in over the last several years, due to the numbers of people moving to these regions from Sydney. With the general slow down in Australia and the ridiculous Vendor Tax that the NSW State Government introduced last year, both markets growth rates have slowed considerably after recording 100% growth over the previous 5 years.
Now with the announcement the Vendor Tax has already been abolished, and strong population growth continuing to both Coasts (South Coast over 60,000 p.a.), we expect solid growth to return in 2006. Initially we may see markets soften as those who were holding off selling because of the Vendor Tax all come onto the market, but things will come right by 2006. The only hurdle remaining will be the high entry levels for both markets.
Melbourne
Similar to the Sydney market, Melbourne has been correcting due to building over the population growth demand. However it is already showing some signs of having corrected and some growth may again be evident. Not presently recommended.
Gold Coast
fter several tremendous growth years, the Coast has finally had a correction over the last 18 months and has actually been one of the worst performing South East Queensland regions last year falling 5.4%. While the population growth and scarcity of land will turn this around and existing stock in well located areas will continue to give solid returns, with no quality land left at affordable prices, we presently are not recommending new options on the Coast. It is not the time to be investing in new areas west of the highway or north of the Coomera River (in Upper Coomera region) at present.
Sunshine Coast
The Sunshine Cast has also been a great performer over the last few years, but has slowed in line with the general overall market slowdown. The northern end of the Coast presently looks the strongest with last 12 months housing prices showing - Noosa Shire +2.8%, Maroochy Shire -5.0%, Caloundra Shire – 9.6%. Sales volumes at Peregian Springs have picked up again substantially over the last 2 months.
Brisbane
The Brisbane market continues to be one of our strong buy recommendations despite being quite flat for the last 12 months. Unlike the Southern capitals of Sydney and Melbourne, Brisbane has been building at rates only just ahead of population growth demand. This small over-supply will quickly be consumed by the 40,000 migrants arriving each year. We do believe you have to be quite selective at present and concentrate on areas in the growth corridors to the north, southeast and southwest (Springfield Edge City), where good infrastructure exists or is under construction.
New options in key areas have lowered our entry levels to around $270,000.
Townsville
Townsville continues to be the outstanding option in regional Queensland due to its more stable economic environment compared to its main competitor – Cairns. With the economy nicely balance between Tourism (Great Barrier Reef/Magnetic Island), Defence (major Defence base), the Port (2nd largest in Queensland) and Mineral Smelters, (huge expansions happening), it is in great shape for on-going growth. With a scarcity of land development to keep pace with population growth and 44% of the population renting, Townsville will be an excellent medium term option for Investors.
Much has been written of the overall Australian Market at present but as stated a number of times previously, it is a much larger market than the New Zealand market and has to be analysed on a region-by-region basis to avoid the overriding influence of Sydney.
Sydney
As predicted by us over the last 2 – 3 years, the impact of building at rates well above population growth rates has finally caught up with the over-valued Sydney market and it has been correcting now for the last 12 months. As further correction is likely over the next 12 months, Sydney is not recommended.
Other NSW Regions
The Central Coast (north of Sydney) and the South Coast (south of Sydney) have both been extremely good areas to invest in over the last several years, due to the numbers of people moving to these regions from Sydney. With the general slow down in Australia and the ridiculous Vendor Tax that the NSW State Government introduced last year, both markets growth rates have slowed considerably after recording 100% growth over the previous 5 years.
Now with the announcement the Vendor Tax has already been abolished, and strong population growth continuing to both Coasts (South Coast over 60,000 p.a.), we expect solid growth to return in 2006. Initially we may see markets soften as those who were holding off selling because of the Vendor Tax all come onto the market, but things will come right by 2006. The only hurdle remaining will be the high entry levels for both markets.
Melbourne
Similar to the Sydney market, Melbourne has been correcting due to building over the population growth demand. However it is already showing some signs of having corrected and some growth may again be evident. Not presently recommended.
Gold Coast
fter several tremendous growth years, the Coast has finally had a correction over the last 18 months and has actually been one of the worst performing South East Queensland regions last year falling 5.4%. While the population growth and scarcity of land will turn this around and existing stock in well located areas will continue to give solid returns, with no quality land left at affordable prices, we presently are not recommending new options on the Coast. It is not the time to be investing in new areas west of the highway or north of the Coomera River (in Upper Coomera region) at present.
Sunshine Coast
The Sunshine Cast has also been a great performer over the last few years, but has slowed in line with the general overall market slowdown. The northern end of the Coast presently looks the strongest with last 12 months housing prices showing - Noosa Shire +2.8%, Maroochy Shire -5.0%, Caloundra Shire – 9.6%. Sales volumes at Peregian Springs have picked up again substantially over the last 2 months.
Brisbane
The Brisbane market continues to be one of our strong buy recommendations despite being quite flat for the last 12 months. Unlike the Southern capitals of Sydney and Melbourne, Brisbane has been building at rates only just ahead of population growth demand. This small over-supply will quickly be consumed by the 40,000 migrants arriving each year. We do believe you have to be quite selective at present and concentrate on areas in the growth corridors to the north, southeast and southwest (Springfield Edge City), where good infrastructure exists or is under construction.
New options in key areas have lowered our entry levels to around $270,000.
Townsville
Townsville continues to be the outstanding option in regional Queensland due to its more stable economic environment compared to its main competitor – Cairns. With the economy nicely balance between Tourism (Great Barrier Reef/Magnetic Island), Defence (major Defence base), the Port (2nd largest in Queensland) and Mineral Smelters, (huge expansions happening), it is in great shape for on-going growth. With a scarcity of land development to keep pace with population growth and 44% of the population renting, Townsville will be an excellent medium term option for Investors.