Hotspotting

Prepare to embark on an exciting journey into the realm of hot property markets with Terry Ryder and Tim Graham! Terry & Tim from Hotspotting, are dedicated to providing the most accurate and unbiased research to help investors make informed decisions on where to buy. The Hotspotting Podcast brings you the latest data, trends, and market statistics, along with in-depth discussions on growth areas and the larger factors impacting Australia's property landscape. Terry & Tim regularly feature special guests from around Australia to share their industry insights and expertise to help investors cut through the noise. Whether you're a seasoned investor or a first-time buyer, this show is a must-listen for anyone looking to build their knowledge and make smarter investment choices. Terry Ryder, with over 35 years of experience as a specialist researcher and writer in residential property, offers expert insights that are completely independent and free from outside influences. Tim Graham has been a buyers agent and mortgage broker for over 13 years along with working in real estate all over the world. Join us on the Hotspotting Podcast and discover the hottest opportunities in the Australian property market today!

Why Apartments Are Booming in 2025 03/08/2025

Why Apartments Are Booming in 2025 The Great Australian Dream still exists, it’s just that - for many - it now means owning an apartment, not a house with a white picket fence. As property prices continue to grow, the dream of owning a freestanding house has morphed into the dream of owning an apartment - for more and more Australians. Apartment living is no longer just a financial choice, but a conscious decision to seek out a different way of living - a more affordable and low-maintenance lifestyle. The percentage of Australians who live in a freestanding house has been declining since the beginning of the new millennium. About a third of properties in Australia are now attached properties including apartments. As our population continues to grow and household sizes shrink, apartment living has become more attractive. As a result, it has also become a more appealing option for investors as well. The once dominant paradigm of real estate that houses on land showed superior capital growth to apartments is no longer the case. As the new edition of the “Rise and Rise of Apartments” report shows, apartment values are now rising faster than house values in most suburbs throughout Australia including regional locations. In 2023 apartment price growth was stronger than house price growth in 46% of suburbs nationally; by the end of 2024 that was the case in over 60% of suburbs. The report, published by Hotspotting in association with national marketing company Nuestar, shows a growing number of important cohorts are pushing demand for apartments higher - including those looking for affordability, downsizing, location, safety & security and a first step onto the property ladder. The price differential is a big factor. Even in the most affordable markets, the price difference between a house and an apartment is substantial. PropTrack data as of February 2025, shows Sydney has the biggest gap of 55%; followed by the ACT, 45%; Darwin and Melbourne, 42%; and Perth, 39%. Growing demand means apartment price growth is tipped to outpace house price growth in a variety of locations in 2025, as it did in many places last year. Suburbs in which apartments dominate the dwelling mix are now among the most powerful markets in Australia. The market share of apartments is now consistently well above 50% of Greater Sydney sales. In Brisbane, apartments account for 37% of property sales, compared with 32% a year ago. But, the most notable growth pattern is in Canberra, with apartments accounting for 47% of sales compared to 32% at the same time last year. It’s not just owner-occupiers who are emerging as a growing buyer force in apartment markets - investors are also strong. Apartments offer investors more affordable options and better rental yields in desirable locations. In many of the inner-city precincts in our biggest cities, houses can typically cost more than $2 million, but apartments can be bought for less than half of that price level in the same suburbs, in many cases. The more affordable entry point generally means that rental yields are significantly higher for apartments, a key consideration in times of still-high interest rates. That’s why apartments will be an important consideration for investors seeking opportunities in 2025. /episode/index/show/hotspotting/id/35554585

Brisbane: Australia’s Hottest Market 03/07/2025

Brisbane: Australia’s Hottest Market Brisbane was one of the nation’s boom markets in 2024 and likely to do even better this year. The price data shows that Brisbane delivered a strong performance last year, both with house prices and in particular unit prices – but was third in the capital city growth rankings behind Adelaide and Perth. Figures from PropTrack and CoreLogic show Brisbane house prices overall were up 10% last year and unit prices around 15%. In 2025 we expect Brisbane to have another strong year and to overtake those other cities to be the national leader on price growth. Hotspotting recently completed an analysis of all the major markets across Australia and concluded Brisbane is likely to be the strongest location in the nation for price growth. Sales activity continues to rise across the Greater Brisbane area, the vacancy rate is well below 1%, rents continue to rise and there is major upward pressure on prices, with listings of properties for sale still close to the lowest ever recorded. Brisbane is also a standout example of the biggest trend in Australian real estate, the one we call the Rise and Rise of Apartments (a quarterly report we publish in association with national marketing company Nuestar). More and more buyers of all sorts are opting for attached dwellings rather than houses on land, for myriad reasons including affordability. In the past year, units outperformed houses on price growth in most suburbs across the nation – and in Brisbane this was the case for over 80% of suburbs. The days when the dominant paradigm of real estate claimed that houses out-perform on capital growth are long passed. The Brisbane market is underpinned by a range of important factors: population growth boosted by both internal migrants and overseas migrants, a strong underlying economy, big investment in infrastructure projects and major lifestyle factors. The Brisbane market will receive additional impetus from preparations for the 2032 Olympics, which necessitates major investment in sports venues, transport systems and tourism & hospitality real estate. The record shows that cities that host the Olympics receive a significant boost to their property markets, but in the years leading up to the event, rather than following the global spectacle of the Games. All in all, prospects look good for another strong year for Brisbane real estate – and one that’s likely to see the city leading the national pack. /episode/index/show/hotspotting/id/35554300

Australia’s Housing Crisis – How Did We Get Here & How Do We Fix It? | The Property Playbook 03/06/2025

Mining Towns 03/06/2025

Mining Towns Some investors are attracted to the cheap house prices and very high rental yields in resources sector towns but recent events in two of the nation’s iconic locations demonstrate why this can be a strategy fraught with peril. Hotspotting methodology dictates that a diverse economy is a core factor in any location we are willing to recommend – which means locations dominated by one industry sector seldom make it to our hotspots reports. A country town solely reliant on agriculture, a coastal enclave where everything depends on tourism and mining towns are all places we shy away from, because their reliance on a single industry sector makes them vulnerable, volatile and high-risk. This is particularly so with mining towns. Many investors have lost big money buying into booming mining towns, only to see property values collapse when the boom bubble bursts. Moranbah in Queensland had a median house price of $750,000 at the height of its boom more than a decade ago, but later the median fell below $200,000 when circumstances changed. Prices later recovered a little but today the median house price remans less than half of those peak levels. Houses in Port Hedland in WA typically cost over $1 million during the resources investment boom but dropped to well under half that level when the boom ended. More recently they have partly recovered but the median house price today is around $700,000 – about half a million dollars below that boom-time peak. Those kinds of risks remain today, as demonstrated by recent events in South Australia and Queensland. Whyalla in SA has a boom-bust history with its property market because its fortunes rise and fall with the resources sector. Today you can buy houses in Whyalla in the $200,000s and $300,000s and get 6% or 7% rental yields. But the recent highly-publicised problems of the UK billionaire who owns the town’s biggest employer, the steel mill, illustrates how vulnerable Whyalla is. State and federal government intervention has been necessary to try to rescue the situation, at a cost of hundreds of millions of dollars to the public purse. In far western Queensland, the iconic outback mining town of Mount Isa provides another example of the risks. A major mining operation which employs thousands of people is closing down soon, leaving Mount Isa in a difficult position. Local political and community leaders are campaigning hard to revive the town’s prospects, but the future may be grim. A look at the price graphs for Mount Isa locations – which resemble a mountain range rather than a smooth upward curve – demonstrates how volatile this market can be. You can buy houses in the $200,000s and get rental yields around 8% or 9%, but capital growth prospects look rather shaky at this point. /episode/index/show/hotspotting/id/35554260

Shallow Analysis 03/06/2025

Shallow Analysis I sometimes despair for Australians trying to make sense of real estate markets, when the standard of analysis and commentary in news media is so poor. Knee-jerk responses to short-term data sets from economists, journalists and often from the big-name research houses create a mass of confusing, conflicting and contradictory commentary. The commentary around price data is the worst example of this. For a long time, the biggest problem for consumers trying to make sense of market events has been commentators putting too much importance on short-term results. Real estate is a slow-moving and long-term business – and data showing one month’s change in median house prices is meaningless. Yet what we have had recently is commentators, economists and journalists declaring a downturn in national real estate based on one or two months of lukewarm figures. And then, with the publication of the February price data, suddenly the downturn is declared to be over and the boom is back on. Seriously? The major research organisations have analysts who have been around long enough to know that this is nonsense. I suspect they don’t care, as long as it generates headlines. We have to remember that their motivation is not to inform us or help us, but to generate cheap publicity. The headline on a press release from one data house on the third of March declared: Housing Downturn Reverses in February! Housing downturn? Did we have a housing downturn? And how long had this downturn been under way, before it suddenly reversed in February? Two months, apparently. A two-month downturn and then a miraculous recovery! You have to wonder: are they really that stupid? And what was the figure that prompted them to declare the supposed downturn was over? A monthly rise of 0.3%! That’s right, folks, a 0.3% increase in the national median price is enough for alleged experts to decide that the downturn we didn’t know about is already over! And, behind that national figure, three of the capital cities recorded zero growth in February. It is perhaps more pertinent to look at what the figures say for the latest quarter – three months of data is more meaningful. The key points in the quarterly figures include these:- Perth house prices are no longer growing, providing further confirmation that the Perth boom has well and truly passed its peak Adelaide, Darwin and Brisbane had the best growth among the capital cities – but some of the regional markets had the best quarterly growth, including Queensland, South Australia and Western Australia. Sydney and Melbourne house prices were down about 1% over the quarter. Both showed small increases in February but it’s too soon to say whether this is a serious recovery. In the unit markets, there was solid quarterly uplift in Brisbane, Adelaide and Perth (the unit market in Perth is doing better now than the house market, as we predicted) – and those three key regional markets (Queensland WA and SA) continue to do well. The key message from all this is that one month’s figures are meaningless. They do not constitute a trend that is worthy of major headlines – but that won’t stop news media from telling us that the fictional downturn is over. /episode/index/show/hotspotting/id/35554235

Regional QLD: 2025’s Hottest Market? 02/27/2025

Regional QLD: 2025’s Hottest Market? Regional Queensland had a pretty good year for price growth in 2024 but I’m predicting it will have an even better one in 2025. There’s mounting evidence that the combined weight of internal migrants moving to Queensland and investors increasingly pivoting from Western Australia to Queensland will drive significant price uplift this year. In 2024, according to PropTrack figures, the median house price for Regional Queensland increased 10%, which was well above the national average (4%), and better than our three biggest cities, but was slightly below the level of growth achieved in Regional South Australia and Regional WA (which both increased about 13% last year). Across the unit markets, Regional Queensland rose about 7% - which, again, was better than the national average (3%) but below the level of growth achieved in both SA and WA. But 2025 shapes as being even better. I recently completed an analysis of the major residential property markets of the nation to determine which jurisdictions would likely have the best price uplift this year – and this ranked Regional Queensland No.1 among the regional markets across the states and territories - and better than most of the capital cities as well. Other factors that may boost property markets in Queensland this year include a recent change of state government, with some new incentives coming into the Queensland market, as well as the recent reduction in interest rates, although this won’t have any major influence. So, overall, we expect Regional Queensland to be among the best performers in the nation this year. Queensland continues to receive more benefit from internal migration than any other state and territory – and increasingly is being targeted by investors. Regional Queensland has an array of regional centres that offer affordable prices, attractive rental yields and growth local economies – boosted, in many cases, by a significant infrastructure spend. This is a recipe for price growth and we expect ongoing uplift in many of those regional centres – including Toowoomba, Bundaberg, Mackay, Gladstone, Rockhampton, Cairns and Townsville – as well as smaller centres including Gatton and Kingaroy. Buyers should keep in mind, however, that many of these Queensland locations are being heavily targeted by both home buyers and investors – and they are very competitive markets, with properties selling very quickly, in some cases. /episode/index/show/hotspotting/id/35446425

Next $1M Suburbs Revealed! 02/27/2025

Next $1M Suburbs Revealed! Since the start of the pandemic in 2020, many of Australia’s property markets have experienced some extraordinary price growth. Many locations, both city-based and regional, achieved unprecedented price increases with median house and unit prices soaring as demand hit new highs. Where once a million-dollar house or unit median was unusual, that recent growth launched many locations into that club for the first time. As of January 2025, there were 1,194 suburbs or towns with a median house price or median unit price of $1 million or more – 50 more than in September 2024. These figures show that although price growth may have eased in some locations in the past six months, the number of million-dollar markets continues to increase throughout Australia. And there are still plenty of opportunities for investors to find markets that are set to tip over into million-dollar markets in 2025. Twice a year, Hotspotting joins national buyers agency Propertybuyer in publishing the National Million Dollar Hotspots report. This analysis shows the top ten markets in Australia that are “teetering” on the edge of a million-dollar median. They are the markets where price growth has been steady in recent years and demand remains strong. With that trajectory set to continue these markets will soon breach the million-dollar barrier. They are also strong markets for investors, where rents have been rising, yields are solid and vacancy rates are low. There is a distinct lure to investing in a suburb with a million-dollar median and it’s not just the prestige of the price tag. The magic of buying in a million-dollar suburb is its capital growth potential. By reaching a million-dollar median it’s already proven to be a desirable location where owner-occupiers and investors are prepared to pay top dollar to secure a piece of the action. Locations teetering on the edge of becoming million-dollar median suburbs are generally undergoing gentrification and have significant infrastructure spending either underway or proposed, which means ongoing price growth. There are plenty of inner-city markets throughout Australia which already have million-dollar medians, but successful investors are those who find locations where prices aren’t just rising, but the fundamentals and amenities are in place to ensure ongoing solid price growth and increasing demand for properties in the suburb. It’s essential when considering a million-dollar location to invest in that it meets a variety of criteria, not just price point. There needs to be ongoing demand for property and significant amenities to meet community needs, such as public transport, shops, schools and recreation spaces, whether that be beaches, parks or lakes. Infrastructure spending is also important, as is solid population growth and access to good local employment opportunities. These are factors that will keep buyers returning time and again to these suburbs and increased buyer demand is what will keep prices increasing to $1 million and beyond. Southport on the Gold Coast is a good example of this. Within less than six months the median house price in Southport, which was a selection in our October 2024 report, has breached the $1 million median mark. It had a median house price of around $970,000 in September 2024, which hit $1.04 million in February 2025 – that’s a rise of $70,000 in just five months. The suburb has achieved 15% median house price growth in the 12 months to January 2025 - and is an example of what can be achieved in the Million Dollar Hotspots. /episode/index/show/hotspotting/id/35446380

Chalmers vs. Landlords: Who’s Right? 02/26/2025

Chalmers vs. Landlords: Who’s Right? Was the Federal Treasurer being serious when he suggested that investors pass on the new interest rate cut to tenants in the form of cheaper rents? Has Jim Chalmers lost the plot completely or was he making a shallow pitch to voters on the eve of a Federal Election? To suggest that investor owners are in a position to hand out financial benefits to tenants because of this one, very small, isolated reduction in their costs suggests that Chalmers is either divorced from reality or he’s having a cheap shot at landlords to win favour with renters and maybe a few extra votes. I have to say that the more I see Chalmers in action the more I am convinced that he is one of Australia’s slimiest politicians. Has the Federal Treasurer forgotten that this isolated, not-to-be-repeated-any-time-soon interest rate drop was preceded by 13 interest rates rises – and then more than a year of persistently high interest rates? Is he unaware that, in addition to paying the massive hikes in loan costs, which still remain prohibitively high, property owners have also had higher taxes, higher council rates, higher insurance premiums and higher maintenance costs. Properties that paid their own way (in other words, the rent covered all the costs of ownership) prior to May 2022 when the first interest rate rises happened, have long since ceased to be cashflow positive or cashflow neutral. Rental properties that previously paid their own way have become businesses that lose money week after week. Owners are having to put in part of their weekly wages to prop up rental properties, because the rent doesn’t come to covering it. Many owners have sold up and left the rental property business because they could not afford to keep going – keeping in mind that most owners are mum-and-dad investors on average incomes and can’t afford to lose money week after week because of the repeated interest rate rises all that occurred while Jim Chalmers was Federal Treasurer. And this small interest rate reduction, which is no thanks to Chalmers and his government, does not change that situation. Chalmer by name, but certainly not by nature. One of the nation’s news media outlets responded to his comments by interviewing small investors who own one or two properties and have been struggling with the high costs of ownership. One of them said the first interest rate cut in more than four years would save him about $100 a month on an investment property and he commented. “In the grand scheme of things, it’s a small saving. Any suggestion that mum-and-dad investors should pass that on to tenants, is absolutely ridiculous. “As investors, we’re already paying so much to hold our property. Land tax has gone through the roof if you’re in Victoria, along with skyrocketing insurance costs, council rates and compliance. “We get a measly 0.25 of a percentage point rate cut, and we get asked to pass that to tenants. It’s simply a ridiculous suggestion, given that everyone who has a mortgage, including us landlords, have been hurt by the 13 rate rises in the past three years.” Couldn’t agree more. /episode/index/show/hotspotting/id/35445560

$1 Million Homes: Australia’s Housing Crisis 02/21/2025

$1 Million Homes: Australia’s Housing Crisis One of the most significant housing stories in the past year has slipped under the radar of news media, with very little commentary. The latest official data from the Australian Bureau of Statistics shows that it now costs over $500,000 to build the average house in this country. That’s the cost of construction of the dwelling and doesn’t include the land price. Given that the price of residential land is also escalating to record price levels, the reality is that the typical house and land package in a capital city is beyond the reach of most young buyers. This, in simple terms, is the essence of the housing affordability problem that has created a national crisis. Australia needs to build more homes – a lot more than the industry is currently able to build – but the obscenely high cost of building both houses and apartments is the largest single barrier to achieving it. The latest ABS figures tell a very sad story. They show that the nation, in 2024, fell 70,000 home approvals short of the target set to fix the housing crisis – AND that home building costs have hit a grim new record high. Latest Australian Bureau of Statistics figures show there were 170,719 homes approved in 2024, the second worst annual figure since 2012, with experts warning government efforts to address the housing crisis so far have failed to make a difference. And affordability is getting worse, with the average cost of building a new house in Australia surpassing $500,000 for the first time in December, according to the ABS data, made worse by new requirements for sustainable builds. Making a bad situation considerably worse is the soaring cost of home sites. The Housing Industry Association says that surging land values are problematic for the struggling development sector, which is already battling soaring labour and materials costs. Extreme housing block costs have also coincided with falling prices for established houses – making the significant premium on brand new homes a hard sell for builders. Housing Industry Association figures showed the median price of land across Greater Sydney now stands at $2,000 per square metre. That means that even a tiny 300 square metre block of land costs $600,000. Land prices are less – but still very expensive – in Melbourne, where that small block costs $320,000, and it’s similar in both Perth and Brisbane. But that 300 square metre block is below the normal block size. In Sydney the median lot price is $710,000 compared to around $400,000 in both Melbourne and Brisbane. Add on that typical cost for building a home – and it makes a new house on land over $900,000 in Brisbane and Melbourne – and around $1.2 million in Sydney. Housing Industry Association economist Maurice Tapang said the dramatic extra costs of buying land and building, versus buying established homes, could squash demand for new homes. Tapang said the price of land was now the biggest constraint on new housing construction in Australia’s capital cities. PropTrack economist Paul Ryan said: “It’s becoming increasingly hard to make new housing equations stack up. There’s lots of choice for established homes and the prices have gotten relatively more attractive compared to new homes, and that’s something we’ve heard a lot of from developers”. The HIA-CoreLogic Residential Land Report showed that the median price of a capital city lot increased by 9.2% in the September quarter to $408,160 compared to a year earlier. Tapang said: “Land prices have risen three times faster than the rate of growth in the ABS Consumer Price Index (CPI) and five times faster than growth in the cost of home building materials as measured by the Producer Price Index for the September quarter 2024.” At the same time, the cost of building a house now averages $537,000 nationally, according to the ABS, following the hyperinflation of construction costs since the pandemic. Add those two figures together – the median lot price and the average cost of building a house – and you have $945,160. And that, in one sentence, is the affordability issue. But I haven’t heard a single politician in Australia, at any level, suggest a policy to deal with this ridiculously high cost for new homes. And it begs the question: are politicians in government around Australia even aware that the cost of a new house on land is getting scarily close to $1 million? /episode/index/show/hotspotting/id/35373395

Sydney’s Boom Suburbs Revealed! 02/14/2025

Sydney’s Boom Suburbs Revealed! Price data for Sydney provides a striking example of why it’s so important not to generalise about property markets. According to the big-name research sources, Sydney prices grew only a few percent overall in the past 12 months, but individual precincts within Greater Sydney have recorded price growth at boom levels. Unfortunately for people trying to make informed real estate decisions, economists and journalists like to speak about “the Australian property market” and forecast what will happen with “Australian house prices” in the year ahead. This is not only worthless information for Australians consumers, but it shouts very loudly that the economists and journalists making those generalisations know very little about residential real estate. Even data on “Sydney house prices” is misleading and next to useless, because it tells us nothing about what’s happening in the Northern Beaches suburbs or in the many locations within the Canterbury-Bankstown LGA or out at Blacktown or further west at Penrith. Because some of the individual precincts within the Greater Sydney metropolitan area have booming property markets. According to PropTrack data, Sydney’s median house price grew just 2.5% in the past 12 months, but Hotspotting analysis shows that most of the suburbs in the City of Canterbury-Bankstown rose by 12-15% and some suburbs increased more than 20%. Several of the unit markets in this LGA have also recorded double-digit growth in their median prices. It’s because this precinct is an out-performer within the Greater Sydney area that we have been featuring it as one of our main recommendations for Sydney over the past 12 months or so. In the Bayside LGA, another market we have recommended in our Top 5 Sydney Hotspots report recently, many suburbs have recorded median price growth well above 10% in the past year – and this includes both house and unit markets. It’s worth remembering that more than half of all sales across Greater Sydney now are attached dwellings – units, townhouses, apartments. The market share of houses on land has been falling steadily over the past 12-18 months and now attached dwellings dominate. Several of the unit markets in the Bayside LGA, including some that have median prices in the $700,000s, have recorded double-digit annual price growth in defiance of the average results for Greater Sydney. It's true also of the Inner West LGA, which is increasingly dominated by attached dwelling sales. The median house price in most suburbs is well above $2 million, but many suburbs have median unit prices in the $800,000s and $900,000s – and some of those have recorded median price growth in the 7% to 12% range in the past year. Again, this is well above Sydney averages – and it highlights the key message, that real estate is local in nature and that buyers should be focusing on the areas that are likely to perform city norms. And 2025 will be no different. /episode/index/show/hotspotting/id/35218170

NSW's Work-From-Home Shift 02/11/2025

NSW's Work-From-Home Shift The trend we have dubbed the Exodus to Affordable Lifestyle is one the key reasons we expect Regional NSW to deliver strong residential property markets in 2025. The trend, of course, is not new – with big cities like Sydney losing population to internal migration for the past 10 years. But the trend remains strong and has not slowed down or reversed, despite forecasts by some economists that there would be a movement of people back to the cities - with big businesses demanding that workers return to the office rather than work remotely. The latest vacancy rate data for office space around Australia shows that the “return to the office” movement is not happening in a major way. The Property Council of Australia, which represents the big end of town including major developers and owners of office buildings, is trying to put a positive spin on it, but the reality is that office vacancies overall are not improving in Australia as the work remotely trend continues to impact the top end office market. The new Property Council report show than more offices were empty across the country in January than six months ago as the work from home trend continues to create headaches for Australia’s big-city landlords. Australia’s office vacancy rate nudged up from 14.6% to 14.7% over the six months to January, the latest figures from the Property Council show. That’s a very small rise – but the expectation was that vacancies would be falling significantly by now, as people move back to the cities and return to the CBD office buildings. In Sydney, home to many finance, insurance and tech workers, the vacancy rate jumped from 11.6% to 12.8%, while the number of empty floors in Melbourne remained unchanged, at a historic high of 18%. Indeed, office vacancy rates are between 9% and 18% in seven of the eight state and territory capital cities. The highest at 18% is Melbourne which is the basket case among the nation’s economies and property markets of all kinds. The Property Council called for “Active leadership” from the Victorian State Government to turn around the fortunes for Melbourne, which has Australia’s second largest CBD, the Property Council says. The AFR reported that major companies last year issued mandates for their staff to return to the office, but these figures show it’s not happening in any major way – and both Melbourne and Sydney continue to have huge vacancies. The movement of people from the biggest cities to regional areas is all about affordability and lifestyle, but enabled by technology which allows more people to work remotely – which is why office vacancies are so high. Sydney, with a median house price around $1.2 million, has been steadily losing population and a proportion of that has been relocating to regional NSW, where the median house price is about $750,000 and plenty of regional cities and towns have houses on offer for less than $500,000. This is a key reason why Regional NSW outperformed Sydney on price growth recently. In the past 12 months Sydney’s median prices have risen 1.9% for houses and 1.1% for units, while Regional NSW has managed 3% for both houses and units – with a number of individual regional markets doing considerably better than those averages. Many suburbs of Wollongong have increased 7-9%, and a number of Newcastle suburbs have recorded double-digit growth in their median house prices, as have some of the Albury locations and several of the suburbs of Tamworth. A recent analysis conducted by Hotspotting ranked the eight capital cities and six state regional markets – a total of 14 major jurisdictions – from 1 to 14 based on a series of different metrics and Regional NSW ranked 6th out of 14 for price growth prospects in 2025. At Hotspotting, we expect 2025 to be a solid year overall in Regional NSW markets – but you need to see our Top 5 Regional NSW Hotspots report to find out which locations will perform the best and out-perform market norms – this year and beyond. /episode/index/show/hotspotting/id/35218150

Loans Surge in 2025 02/10/2025

Loans Surge in 2025 Prospects for strong buyer demand in 2025 look good, with the latest data released by the Reserve Bank indicating a significant rise in loans for home buyers, investors and businesses. This challenges earlier predictions of a slowdown by economists, who continue to be obsessed with interest rates as the big factor that determines everything in real estate – despite all the mountains of evidence to the contrary. Loans to residential property investors are the highest for two years, while loans to home buyers are the highest in 18 months. The official data shows that, as at the end of December, annual business credit growth had reached 8.9%, marking the highest growth rate since May 2023. Similarly, growth in investor loans for residential property reached 5.1% in December 2024, up from 4.7% in November, achieving its highest growth rate since December 2022. Owner-occupied mortgage lending also grew, maintaining an annual growth rate of 5.7%, the highest since April 2023. These increases have occurred despite stubbornly high interest rates and notwithstanding the forecasts from major economists that real estate demand and prices would fall because interest rates have remained unchanged at those high levels since November 2023. Strong demand has continued because the national population has been rising strongly, boosted by high levels of migration from overseas; because the labour market has been quite strong and wages have risen; because most people got a tax cut in the middle of last year – and overall borrowing capacity has been pretty good. In addition to those national factors, there have been myriad local factors which have caused individual property markets to boom. Perhaps the biggest single factor is that there is an unprecedented level of infrastructure development – over $500 billion in projects under way in the past year and more in planning – and this creates high levels of economic activity and employment, which translates into demand for real estate. It all bodes well for a solid year in residential real estate, with further impetus likely to come from reductions in interest rates – and possibly a change in federal government, which looks increasingly likely. But keep in mind that real estate is local in nature – and there will be out-performers in 2025, as there were last year and indeed in every year in recent memory. /episode/index/show/hotspotting/id/35218120

Perth Slows, Regions Surge 02/05/2025

Infrastructure Development 02/04/2025

Infrastructure Development One of the fundamental factors we look for at Hotspotting when assessing locations is infrastructure. We want to know that a location has good basic infrastructure – schools, shops, government services, public transport and recreation amenities. If there is also a major factor in the market like a university campus or a hospital, this can be significant as a big generator of demand for real estate. In addition is good existing infrastructure, one of the big game-changers we look for is major new infrastructure under construction or in planning. A $500 million or $1 billion infrastructure project is a big generator of economic activity and employment in an area while under construction – and, with certain types of infrastructure, when completed and operational. And this means strong demand for dwellings, both to buy and to rent. This is one of key factors that has kept many property markets across Australia busy and vibrant during times of high inflation, high interest rates and economic uncertainty. And here’s the key factor: the level of infrastructure investment currently occurring in the nation is unprecedented, in my experience, which is more than 40 years researching and writing about real estate issues. Projects under way or completed in 2024 across Australia totalled well over $500 billion, with another $370 billion worth in advanced stages of planning. These projects include hospitals, universities, airports, motorways, rail links, ship-building enterprises and major energy projects like wind and solar farms. Partly at least, the level of construction of big infrastructure developments was inspired by the economic damage caused by the Covid lockdown periods and a desire by governments to bring on big ticket projects to generate economic activity and jobs to avoid recession. These developments can have huge impacts on property markets, because they create demand for workers and for businesses that provide products and services. And the impacts can be long-lasting. If a new $1 billion hospital is proposed, it may create 3,000 or 4,000 jobs in construction – but have even bigger impact after it is completed, because there are often as many as 6,000 jobs in the operation of this major facility. I recently conducted an analysis of infrastructure investment in the capital cities and regional areas of Australia on a per capita basis – in other words, the level of spending relative to the population of the city or regional jurisdiction. And the places with the biggest impacts from current and planned infrastructure were Darwin, Brisbane, Adelaide and Melbourne among the capital cities, and the regional areas of Queensland and South Australia. Some of the big ticket infrastructure projects currently happening, with direct and indirect impacts on real estate markets are … the $31 billion Inland Rail Link, which is connecting Melbourne to Brisbane via regional NSW; the new Western Sydney airport, which includes new road and rail links, as well as education, medical and commercial precincts, totalling many tens of billions of dollars in investment; and major new hospital developments in regional cities like Toowoomba, the Gold Coast and Bundaberg in Queensland; Wollongong and the Tweed region in NSW: Albury-Wodonga at the NSW border with Victoria; and several of our capital cities. Many of these hospital projects will each cost over $1 billion and will be massive generators of economic activity and employment, and from that demand for real estate. It's a key factor to look for when considering good places to buy for future capital growth. A location with a big program of infrastructure developments will always have rising prices. /episode/index/show/hotspotting/id/35141550

The Property Playbook - EP9: Smart Money Habits for First-Time Buyers with Glen James 01/30/2025

Transform Your Property Portfolio into a Reliable Retirement Income - Webinar Replay 01/23/2025

Perth Market 01/22/2025

Perth Market All the key indicators suggest that the Perth boom is past its peak and subsiding. Our analysis of all the major market jurisdictions across Australia, using a range of different performance metrics, indicates that Perth will not be the leading performer on price growth in 2025 – or anything close to it. After two consecutive years as the national leader on price growth, we feel confident in predicting that Perth is unlikely to repeat that performance in 2025. Perth was undoubtedly the national leader on price growth in 2023. Its median house price rose 16 percent (the national average was 8.6 percent) and its median unit price increased 12 percent (national average was 6.4 percent). In 2024 Perth repeated the performance, leading on both house prices (up 17 percent) and unit prices (up 19 percent), both more than three times national averages – but challenged in both categories by Brisbane and Adelaide. But it was evident in the latter part of the year that the rate of growth for Perth was slowing month by month. Earlier in 2024, the annual growth rate for houses was well above 20 percent. With each passing month, the annual growth rate is smaller, although it still appears to be impressive. And, indeed, there is a growing list of forward indicators which say Perth is on the wane. Perhaps most significant is that sales activity has declined, even though stock on the market has risen steadily since the middle of 2024. In this regard, Perth is the weakest of the major cities and regional markets, with activity steadily waning. Vacancy rates are also easing and rents are no longer rising rapidly. Indeed, according to the REIWA, there has been little rental growth in Perth since March 2024. With so many investor purchases in the past 2-3 years, rental supply has risen – changing the supply-demand equation. Other sources indicate a slowdown in population growth and less demand from investors. The buyer frenzy is subsiding, which is confirmed by our conversations with real estate professionals at the coalface of the Perth market. For those still interested in buying in the Perth market, a key trend is that more buyers are pivoting to attached dwellings. One of the main catalysts for the Perth boom of recent years was its cheap houses, but now the city’s median house price is similar to Melbourne and Adelaide. The relative bargains are now being found in the unit market and there are a number of good options there. But home buyers and investors considering the Perth market need to be aware that the peak of the market has passed and the stellar price growth of 2023 and 2024 is unlikely to be repeated. /episode/index/show/hotspotting/id/34964590

Adelaide Ascends 01/17/2025

Adelaide Ascends If you’re confused about what’s happening with rents in Australia, you can be forgiven. That’s especially so if you use news media as your main source of information about residential real estate. The information – or perhaps more correctly, misinformation – in news media is highly confusing and in many cases contradictory, with one headline saying the complete opposite to another. Here are two headlines that appeared on the same day, the 10th of January: The worst is over: slowest rise in rents in four years Affordability crisis: tenants feel the pinch as rents surge So, as usual, Australian real estate consumers need to look elsewhere, somewhere other than mainstream media, to find out what’s really happening in housing markets. One of the strange things about residential rents, which pops up regularly in news media, is the bizarre notion that if the latest stats suggest that the rate of growth in rents is slowing, then tenants across the nation are celebrating. They’re apparently popping champagne corks because the rate of rental growth currently is less than it was last year. Let’s be clear: the greatest wish of tenants is NOT slower growth in rents. It’s NOT for rents to stop growing. And contrary to the apparent belief of The Greens, they don’t want a rental cap. What they want is for rents to FALL. People who rent in Australia, about a third of households, want to see a bigger choice of places to live in – in other words, they want higher vacancies. And they want rents to come down. There are two main reasons why that isn’t happening and cannot happen: (1) because vacancies are at historic lows, as they have been now for three years, and there are no remedies in sight; and (2) because interest rates are persistently high and the owners of rental properties need high rents to cover their costs. Having said that, it’s clear that - in some locations - rents have reached a ceiling and are unlikely to go much higher in the short term. Tenants cannot keep paying higher and higher rents – and higher and higher proportions of their incomes – on rental accommodation. That is why the rate of growth in rents has slowed in SOME – but certainly not all – locations across Australia. But the true wish among tenants – for rents to decline – is highly unlikely to happen any time soon. SNIPPET: There’s a lot of confusing and conflicting information in mainstream media about what’s happening with residential rents. Some headlines have declared that the worst is over for tenants because the rate of growth in rents is slowing down – as a national average. But other headlines have claimed that rents continue to surge higher and tenants continue to be in a world of pain. The reality is that rents are still rising, although in SOME locations the rate of growth is slowing down. But with vacancy rates continuing to be at historic lows in most places across Australia, and interest rates stubbornly high, we don’t have the conditions for rents to fall any time soon – particularly as there are no solutions in sight for the shortage which is causing rents to be high and rising. /episode/index/show/hotspotting/id/34889870

Rent Confusion 01/17/2025

Rent Confusion If you’re confused about what’s happening with rents in Australia, you can be forgiven. That’s especially so if you use news media as your main source of information about residential real estate. The information – or perhaps more correctly, misinformation – in news media is highly confusing and in many cases contradictory, with one headline saying the complete opposite to another. Here are two headlines that appeared on the same day, the 10th of January: The worst is over: slowest rise in rents in four years Affordability crisis: tenants feel the pinch as rents surge So, as usual, Australian real estate consumers need to look elsewhere, somewhere other than mainstream media, to find out what’s really happening in housing markets. One of the strange things about residential rents, which pops up regularly in news media, is the bizarre notion that if the latest stats suggest that the rate of growth in rents is slowing, then tenants across the nation are celebrating. They’re apparently popping champagne corks because the rate of rental growth currently is less than it was last year. Let’s be clear: the greatest wish of tenants is NOT slower growth in rents. It’s NOT for rents to stop growing. And contrary to the apparent belief of The Greens, they don’t want a rental cap. What they want is for rents to FALL. People who rent in Australia, about a third of households, want to see a bigger choice of places to live in – in other words, they want higher vacancies. And they want rents to come down. There are two main reasons why that isn’t happening and cannot happen: (1) because vacancies are at historic lows, as they have been now for three years, and there are no remedies in sight; and (2) because interest rates are persistently high and the owners of rental properties need high rents to cover their costs. Having said that, it’s clear that - in some locations - rents have reached a ceiling and are unlikely to go much higher in the short term. Tenants cannot keep paying higher and higher rents – and higher and higher proportions of their incomes – on rental accommodation. That is why the rate of growth in rents has slowed in SOME – but certainly not all – locations across Australia. But the true wish among tenants – for rents to decline – is highly unlikely to happen any time soon. SNIPPET: There’s a lot of confusing and conflicting information in mainstream media about what’s happening with residential rents. Some headlines have declared that the worst is over for tenants because the rate of growth in rents is slowing down – as a national average. But other headlines have claimed that rents continue to surge higher and tenants continue to be in a world of pain. The reality is that rents are still rising, although in SOME locations the rate of growth is slowing down. But with vacancy rates continuing to be at historic lows in most places across Australia, and interest rates stubbornly high, we don’t have the conditions for rents to fall any time soon – particularly as there are no solutions in sight for the shortage which is causing rents to be high and rising. /episode/index/show/hotspotting/id/34889850

Albanese Housing Denial 01/17/2025

Albanese Housing Denial The Prime Minister is suffering from a serious case of denial if he believes that his press conference soundbite about building 1.2 million new homes is plausible, credible and achievable. Anthony Albanese had his big media event in August 2023 when he stated this objective of 1.2 million new homes in five years – but almost 18 months later it’s abundantly clear to everyone except members of the government that it’s not going to happen – indeed, was NEVER going to happen. It’s almost as if the PM and his cohorts believed that staging the publicity event in 2023 was all they needed to do - make the announcement of a target which has never been achieved in the nation’s history and then sit back and watch it happen. Job done. Here we are in 2025 and all the official data shows that building approvals - and in particular building commencements - are so far behind the levels needed to reach the target, that it can already be dismissed as fanciful – indeed, almost childlike in its naivety and idealistic stupidity. In the past 12 months building approvals totalled around 170,000 – but approvals don’t always translate into actual construction, particularly right now with all the problems in the home building industry. So we are so far short of where Australian needs to be to meet the target that there is really no realistic hope of achieving it. And it’s noteworthy that the original target date was mid-2029 and now, quietly, hoping that no one notices the Federal Government has moved the target date to 2030. But when challenged by journalists about the stark lack of results, the PM becomes angry and defensive – as he has done at recent press conferences. The Federal Government appears to think that the industry should just go out and build the homes because the Government says they should – and is oblivious to the long list of serious problems which are preventing it from happening. Building companies are going broke at the rate of nine per day and that is happening for a reason – but you have to wonder if the Federal Government is even aware of this reality. The cost of building new houses and in particular new apartments has become so high, so catastrophically high, that in many instances it’s not economically feasible to build them because the average buyer won’t pay the increasingly high price for new dwellings. Is the PM remotely aware of that? To build homes you need a healthy supply of tradespeople – but the industry has a chronic shortage and needs tens of thousands more to be able to create the dwellings needed – and there aren’t enough apprentices coming into the industry. One of the reasons the home building industry can’t find the tradies it needs – and why the ones that exist are increasingly expensive – is because federal and state governments have initiated record levels of investment in infrastructure – and there were over $500 billion in projects happening in 2024 and more to come this year and beyond. This has removed tens of thousands of tradies from home building - to work on the more lucrative headline projects initiated by politicians facing looming elections. Is the Prime Minister aware of that? Because it’s one of the key reasons his media soundbite home-building target will not be achieved. Does Anthony Albanese know that the average time it takes to build a house or an apartment has blown out enormously in recent years, thanks to bureaucracy and political interference in the process? That the cost of building has escalated enormously because of new rules imposed by the various levels of government? And those factors, plus persistently high interest rates, are the key issues that are sending building businesses broke at the rate of nine per day. Australia has never created 1.2 million new homes in any five-year period in history and it won’t be happening in the five years following the August 2023 publicity stunt by the Prime Minister. Sadly, Anthony Albanese is in denial about it, so the problems are unlikely to be fixed. SNIPPET: The Prime Minister is in denial if he believes that his press conference soundbite about building 1.2 million new homes is plausible, credible and achievable. Anthony Albanese had his big media event in August 2023 when he stated this objective of 1.2 million new homes in five years – but almost 18 months later it’s abundantly clear to everyone - except members of the government - that it’s not going to happen – indeed, was NEVER going to happen. Here we are in 2025 and all the official data shows that building approvals - and in particular building commencements - are so far behind the levels needed to reach the target, that it can already be dismissed as fanciful. And it’s noteworthy that the original target date was mid-2029 and now, quietly, hoping that no one notices, the Federal Government has moved the target date to 2030. But when challenged by journalists about the stark lack of results, the PM becomes angry and defensive – as he has done at recent press conferences. Let’s be clear: Australia has never created 1.2 million new dwellings at any time in its history and it’s not going to happen in this five-year period – so the shortage will persist well into the future. /episode/index/show/hotspotting/id/34889840

Price Data 01/08/2025

Building Collapses 01/08/2025

Approvals V Construction 12/18/2024

Approvals V Construction Two very different headlines have summed up the problems for Australia’s ongoing housing shortage. One of the recent media headlines declared that building approvals were at a two-year high and that things were improving for the nation’s housing shortage. The other described why building approvals are almost irrelevant – it said that project deferrals are occurring at a record rate. The reality of the current crisis is this: it doesn’t matter how many houses and apartments are approved for construction – and it doesn’t matter how many re-zonings state governments push through or what incentives they hand out to first-home buyers. Most real estate developments are not proceeding because they’re not financially viable. One of those media headlines read: Building approvals hit two-year high as apartment construction surges. This was incorrect - apartment construction is not surging – approvals are, but many projects are simply not being built because they’re not viable in the current environment. It’s so expensive to build that the end price for the dwellings would be far too high for most buyers – and therefore not financially feasible. In October, Australian dwelling approvals reached their highest level in 22 months - with nearly 15,000 new homes approved for construction during the month. ABS data showed total dwelling approvals rose 4.2 per cent for the month, with approvals for apartments and townhouses jumping 25 per cent to over 5,800 units, the highest since May 2023 – but private house approvals fell 5.2 per cent. The AFR showed a startling lack of understanding of the problems in the industry when it declared in a headline: Worst has passed for new home building The article said: “The worst has passed for Australia’s medium- and high-rise housing sector, economists said on Monday, after a jump in approvals of , townhouses and semi-detached homes.” KPMG urban economist Terry Rawnsley said: “The bad times are starting to end … Even with interest rates being unchanged for the year, they still have that confidence that if they can get a project out of the ground they’ll be able to sell it at a profit.” But that, we think, was rather naïve – and others were less optimistic. The Property Council of Australia pointed out that apartment approvals were still at half their level of the development boom under way in FY2018. And Oxford Economics Australia senior economist Maree Kilroy said: “While the latest approval result for apartments was positive, we continue to expect a materially higher dropout rate to commencement.” In other words, many approvals would not translate into construction. She referred to utility connection bottlenecks and trade labour shortages as problems in the sector. Matthew Kandelaars of the Property Council said: “We need to get back to the construction levels seen nearly 10 years ago. We are now six months into the National Housing Accord’s ambitious target of delivering 1.2 million new homes and we cannot allow the target to slowly fade into the background over the next 4½ years.” According to a new report, money is still flowing into the construction industry but more and more of it is being dedicated to renovating. KPMG released analysis of spending in the residential construction sector, revealing that while spending on renovations has boomed over the past five years, new residential construction on a per-capita basis has hit a low not seen since 1988. Over the past five years, spending on new home building has dropped 14 per cent, adjusted for inflation. By comparison, the amount of funding flowing into renovations has increased by 6.5 per cent. KPMG said: “For every nail hammered and brick laid in residential construction, 40 per cent of it is going into renovating a pre-existing home.” So the underlying problem remains. Regardless of how many dwellings are approved, far too few are proceeding to construction – so the fundamental shortage continues and there will continue to be upward pressure on prices and rents. /episode/index/show/hotspotting/id/34480265

Webinar Replay: Reflections & Projections - A Deep Dive into Real Estate Trends & Forecasts 12/18/2024

Webinar Replay: Reflections & Projections - A Deep Dive into Real Estate Trends & Forecasts In this insightful webinar, Terry Ryder, founder of Hotspotting, and Tim Graham, Hotspotting’s General Manager, analyze the surprises and trends of 2024 in the Australian property market and share their projections for 2025. With decades of combined experience, they provide investors with actionable advice on navigating the coming year. Key Highlights 2024 in Review Defying Predictions: Despite high interest rates and inflationary pressures, property prices rose by an average of 5.53% nationally in 2024. Perth led with an astonishing 18.7% growth, followed by regional Western Australia, Adelaide, and Brisbane. Surprise Winners: Hotspotting’s 2024 National Best Buys Report proved remarkably accurate, with 9 out of 10 selected locations achieving growth three times the national average. Shift to Apartments: Demand for attached dwellings surged, driven by affordability and lifestyle preferences, with some unit markets outperforming houses in capital growth. 2025 Projections Second Wind Markets: Regions like the Sunshine Coast, Albury-Wodonga, and Ballarat are emerging from a "pause phase" and are primed for growth, fueled by rising sales volumes and infrastructure developments. Avoid Frenzied Markets: Perth, Adelaide, and regional Queensland hotspots like Townsville are reaching their peaks. Investors should seek opportunities in undervalued markets with long-term growth potential. Surprising Contenders: Cities like Darwin and Launceston, as well as regional Victorian areas, are poised for unexpected growth, offering affordability and strong rental yields. Emerging Trends Affordability Focus: High interest rates are amplifying the appeal of regions with lower entry prices and strong rental yields. Infrastructure Impact: Areas benefiting from large-scale projects, such as Toowoomba and inland rail hubs, continue to attract growth. Changing Investor Mindsets: Long-term strategies and careful market selection are replacing speculative approaches. Special Offers National Top 10 Best Buys Report: Just $249. Best of the Best Bundle: Three premium reports for $399 (save $200). Exclusive Property Course: Register now for early bird discounts on Hotspotting’s comprehensive new property investment course launching in 2025. Special Offers National Top 10 Best Buys Report: Just $249. Best of the Best Bundle: Three premium reports for $399 (save $198). Exclusive Property Course: Register now for early bird discounts on Hotspotting’s comprehensive new property investment course launching in 2025. Register your interest for early-bird specials: /episode/index/show/hotspotting/id/34497680

Best Buys Result 12/17/2024

Best Buys Result You don’t have to be super rich or invest $1 million to make big capital gains in residential real estate: you just need to follow Hotspotting’s signature report, the National Top 10 Best Buys report. Those who followed the tips in our report of a year ago could have made close to $100,000 in capital gains spending as little as $400,000 – or $180,000 in gains after investing $630,000. In December 2023 we published our National Top Best Buys reports for Summer 2023-34. Our top 10 locations for investors to consider covered a wide range of price points, from less than $300,000 and above $1 million. And all 10 regions suggested in that report a year ago include suburbs which have delivered spectacular gains in the past 12 months. Many rose by more than 20% in 12 months, compared with the national average rise of just 5.5%. In Bunbury in Western Australia, you would have paid below $350,000 for the typical house in suburbs like Carey Park and Withers – and seen your investment grow by $90,000 or more, following annual growth between 25% to 30%. Even a modest investment of less than $300,000 for a small unit in Carlton in inner-city Melbourne would have shown excellent capital growth, out-performing the generally flat Melbourne market. Those with more to spend late in 2023 could have achieved over $200,000 in capital growth by buying houses at the median price in locations such as Punchbowl in Sydney and Carrara on the Gold Coast, or apartments in Elizabeth Bay in Sydney. More mid-range were units in Kangaroo Point in Brisbane or at Runaway Bay on the Gold Coast; and houses in Tea Tree Gully in Adelaide or Fairy Meadow in Wollongong – all delivering $100,000 or more in gains for those who bought around the median price for those locations. The average situation arising out of our National Top 10 Best Buys report a year ago was investing $640,000 and achieving a 21% rise in value, which means capital gains of $146,000. We’ve recently published our National Top 10 Best Buys report with our selections to launch 2025. And, in keeping with our tradition of seeking to identify the future hotspots – which means locations with potential for strong price growth, but before those markets rise strongly and become competitive – the new edition of Best Buys does not include already hot markets like Perth, Adelaide and key regional markets in Queensland. We’ve identified places where you can buy sensibly, with due diligence, and look forward to excellent capital growth over time. /episode/index/show/hotspotting/id/34480040

Listings Rise 12/12/2024

Listings Rise The greatest complaint heard most often in real estate across Australia is that there are plenty of buyers, but a shortage of listings. The number of properties for sale has been well short of the levels needed for a balanced market, particularly in the boom cities of Adelaide, Brisbane and Perth. But that is steadily changing. According to SQM Research, total listings of properties for sale nationwide grew 7.6% in November and are now more than 10% higher than a year ago. Perhaps most significantly, there were major rises in November in those three boom cities, with the number of listings up 20% in Perth and close to 17% in Adelaide, with Brisbane recording a rise of 8.6%. That follows significant increases in October also. The rise in listings nationally in November was driven by a 6.4% rise in old listings (stock on market over 180 days) and a notable 22% rise in properties being on the market between 30 to 90 days. SQM Research commented that this strongly indicated that the spring selling season had been a disappointing period for vendors and agents. Cities with significant annual increases in listings included Sydney, Melbourne and Hobart – all up 16 to 17 per cent – and Canberra, up 23% in annual terms. Comparing the current situation with recent history, national listings of properties for sale are still below the levels common before 2021, but have been generally rising since July. In Sydney, listings are the highest they’ve been since 2019 and in Melbourne they’re the highest since November 2020. In Canberra they’re close to the peak levels of 2019. In Perth, Brisbane and Adelaide they’re still well below historic levels but have been rising steadily since mid-2024, with particularly large increases in November. The rise in the number of properties for sale coincides with evidence that the rate of price growth is reducing in those market-leading cities. The big exception in all this is Darwin, the only capital city to record a reduction in the number of listings in November – and it remains 17% below the levels of a year ago. The figures provide further evidence of change in individual markets, with a growing number of indictors that the Perth boom has passed its peak and that there may be stronger price performance in places like Darwin in 2025. /episode/index/show/hotspotting/id/34409530

Media Absurdities 12/12/2024

Media Absurdities Things are constantly changing in real estate nationwide but the one factor that never changes is this: we can always rely on news media to distort the facts and deliver a steady flow of misinformation to Australian consumers, all in the interests of attracting readership, with little regard for accuracy, honesty or fairness. The past week or so has been chockful of media nonsense. If you can believe the headlines, the national property boom is over, house prices are plunging, the rental boom is over and the North Queensland city of Townsville is a mining town. One of the constants of my 40-plus years charting Australian real estate is that there are lines and lines of idiots scrambling to be the first to declare that a boom is over, usually long before it actually is. This is often fed by data research entities like CoreLogic where the key people never let the facts get in the way of good headline and free publicity. So Australia has been resplendent lately with strident headlines declaring that the national property boom is over or words to that effect. Here’s the first problem: we don’t have a national property boom so it’s rather odd to declare that something which doesn’t exist is finished. We have certainly had a boom in Perth, Adelaide and Brisbane among the capital cities, but certainly nothing remotely resembling a boom in the other five state and territory capitals. It’s a similar scenario in the regional markets, with a variety of different situations ranging from downturn and stagnation to moderate growth and, in some cases, strongly rising prices. But nationally growth in house and unit prices has averaged 6 or 7 percent throughout 2024 – and lately the annual growth rate, as a national average, has been 4 or 5 percent. Only in the fertile imaginations of media headline writers would that constitute a boom. But, according to various media outlets, this mythical boom is over – even though the latest figures for annual growth in three of our capital cities and three of our state regional markets are still well above 10%. The only places where the evidence suggests the boom is over are the ones where a boom never took place – like Melbourne, Hobart, Darwin and Canberra. But not only, according to media, is the fictional national boom over, but property prices are plunging. One headline in Fairfax media claimed to reveal Why property prices are plunging across Australia – amid warning they could slide even further. A close examination of the article underneath this startling headline discovered there was no evidence in the story to justify the headline. Quite simply, the headline was a blatant fabrication – which, sadly, is all too common in today’s news media. The article revealed that Sydney’s median price was 0.8% lower than three months earlier but 3.3% higher than a year earlier, while Melbourne was down 1% over three months. Nothing in those figures goes even close to “prices plunging”. In the other major cities prices were still rising and indeed were still growing at boom time rates. House prices were also up in the Combined Regions in the latest month, the latest quarter and the past year– and unit prices were also up nationally, both in the cities and the regions. So, there was very little sign of even minor decline in prices anywhere and certainly no evidence at all of price plunging. So this was yet another instance of a headline which was an outright and blatant lie. And who wrote this rubbish? well, it was the champion of negative media about residential real estate, the endlessly sad Shane Wright who has devoted his career to writing nonsense about property markets. But wait, there’s more. Not only is the fictional national price boom over, but apparently the rental boom is over as well! There have been strident headlines and soundbites inferring that rents are no longer rising. As is so often the case with these big sweeping media statements, the claim was based on a single month’s figures from one source. Nationally, rents rose only 0.2% in November, according to CoreLogic, therefore the boom is over in the simplistic minds of attention-seeking analysts and journalists. And, yes, once again, the source of this myopic and shallow analysis is CoreLogic, a business which publishes lots of major real estate data but is quite dreadful at analysing what it all means. So CoreLogic’s head of research Tim Lawless said: “At 5.3% annual growth, rents are still rising at more than twice the pre-pandemic decade average of 2.0%, but given the weak monthly change the annual trend is set to slow further from here. “It will be interesting to see if the rate of rental growth rebounds through the seasonally strong first quarter of the year in 2025, but beyond any seasonality, it looks increasingly like the rental boom is over”. But other sources tell a different story. SQM Research records a monthly rise of a tick under 1% as the national average for residential rents, with Adelaide up 1.1%, Perth rising 1.9% and Canberra up 1.5%. The national vacancy rate remains a fraction above 1%, essentially unchanged from three years ago, so can anyone justify a claim that the rental shortage crisis and rising rents is all done and dusted? Hardly. Another startling set of headlines resulted from the latest Regional Market Update from CoreLogic which declared that the highest capital growth was occurring in Queensland and WA mining towns. I was truly perplexed because I know there has been little price growth recently in mining towns like Karratha, Port Hedland and Newman in WA and Moranbah in Queensland. However, the headlines resulted from CoreLogic boffins – yes, it’s CoreLogic again - re-defining major regional cities as mining towns. Apparently Townsville, which has one of the most diverse economies in regional Australia, with only minor influence from the resources sector, is now a mining town. So is the key Central Queensland of Mackay, apparently, despite being 2-3 hours’ drive from the nearest coal mine. In WA, the key regional city of Geraldton is also, apparently, a mining town, according to Core illogic, although the nearest iron ore mine is an hour’s drive away. All of this, and a whole lot more, reinforces our view that there is more misinformation than actual information in mainstream media. And that any real estate consumer who bases a decision on the content of media reports is at risk of making a very bad decision. /episode/index/show/hotspotting/id/34409490

2025 Predictions 12/12/2024

2025 Predictions Rumours of the death of ‘the national property boom’ are greatly exaggerated – especially since we didn’t have a national property boom in 2024. Rather, over the past 12 months, we have seen differing market cycles in many locations - as is the usual state of play in real estate throughout Australia. Strong property price growth was recorded in Perth, Adelaide, and Brisbane in 2024, but not in Melbourne, Sydney, Canberra, Darwin or Hobart. Similarly, in the regional areas, there were declining and stagnating markets, as well as some where prices were showing good price growth. This is situation normal in Australian real estate. It’s a big country and real estate markets are very local in nature. So, a national property boom? We haven’t had one. So you ignore headlines declaring that the national property boom is over. So, what can we expect in residential real estate in 2025? Firstly, the major bank economists will predict price declines in 2025 – as they did at the start of 2023 and again at the start of 2024 - and will be proven wrong yet again because it they fail to understand the basic dynamics that drive prices in residential real estate. Politicians will continue to scapegoat their traditional targets of foreigners (migrants, international students and foreign investors) as well as mum-and-dad Australian investors – and enlist the help of shallow journalists to infer that these cohorts are the cause of all the problems in the housing markets. The reality is that investors, local and foreign, are not the problem – they are the solution. They hold the keys to solving the housing crisis. Meanwhile, most State Governments will continue to make the housing crisis worse with anti-investor policies - with the negative ramifications of recent rental reforms to become more apparent as 2025 unfolds. Vacancy rates will remain low, but the rate of rental growth generally will slow because markets have hit a ceiling due to limits in the capacity of tenants to pay more. However, restrictive rental legislation by various state and territory governments will continue to motivate some investors to sell up – thereby making the rental shortage worse. The Greens will continue to embarrass themselves and lose voter support with anti-investor rants, with the Federal Election due early in the year likely to see their influence reduce even more. Investors will continue to pile into the frenzied markets, mostly in regional Queensland -however, the smart money will target locations early in the growth cycle, not at the end. Evidence that the Perth market has passed its peak will become more apparent with a similar slowdown forecast for regional WA. The solid economic and market fundamentals in Adelaide means it will continue to show solid growth next year as well as Brisbane and regional Queensland. Melbourne did not have a good year in 2023 or in 2024, but I believe it will start to rise next year, thanks to the price differential with Sydney and its high population growth. This will occur despite Melbourne having the worst state government and the highest taxes in the nation. Darwin will be targeted by investors and will begin to show some price growth next year, too. More and more indicators are favourable for the Northern Territory capital, with investors seeking its affordable houses and high rental yields. The Exodus to Affordable Lifestyle will continue, boosting many regional markets, as more big city residents seek a different and more affordable way of living, enabled by technology and the ability to work remotely. What we have termed the ‘second-wind markets’ will ignite. These are locations where the market sprinted (with major price growth) from 2022 to 2024, has been catching it breath since then, and now, having got its second wind, is starting to run again. They include regional cities such as Albury-Wodonga and Tamworth in NSW, the Sunshine Coast and Hervey Bay in Queensland, Bendigo and Ballarat in Victoria, as well as Launceston and Burnie in Tasmania. There will continue to be a lot of conjecture about interest rates next year, but the potential impact of any rate reductions will be largely irrelevant and greatly over-rated by many economists and news media. As we’ve learned from the past two years, trends with interest rates are not the major influence on real estate outcomes. If they were, prices would have fallen everywhere over the past two years. And that, clearly, has not been the case. /episode/index/show/hotspotting/id/34409465

Regional Investment Boom 12/05/2024

Regional Investment Boom Victoria’s real estate market is witnessing a significant shift as young first-home buyers increasingly seek affordable housing in regional areas. According to recent data from the Australian Bureau of Statistics (ABS), first-home buyer loans in Victoria soared to 4,202 in July – the highest number in nearly two years. This surge reflects growing confidence among young buyers and a trend towards exploring housing options beyond Melbourne. Nationally, the Commonwealth Bank of Australia and the Regional Australia Institute report that the flow of people from cities to regional areas is now 16 per cent above pre-pandemic levels. The Regional Movers Index indicates a 27 per cent increase in people moving from cities to regional areas compared to those moving in the opposite direction during the June quarter. Over the past year, 11.2 per cent of movers have relocated from cities to regions, with three-quarters settling in Victoria or NSW, up from half of all movers last year. Government incentives such as the First Home Owner Grant and stamp duty exemptions are boosting this trend. Regional Victoria hotspots such as Ballarat, Bendigo and Geelong are seeing heightened interest from first-home buyers eager to take advantage of lower property prices. Greater Geelong, in particular, has emerged as the most sought-after regional LGA in Victoria. And this affordability attraction has equal appeal to property investors. In contrast to Melbourne’s median house price of more than $900,000, regional Victoria offers numerous more affordable options. Geelong’s median house price is $720,000, while Ballarat and Bendigo are even more budget-friendly at $550,000 and $490,000. This affordability makes ownership accessible for buyers who might be priced out of Melbourne’s market. The work-from-home trend, enabled by technology and accelerated by the pandemic, has also contributed to this shift. Many Victorians now have the flexibility to work remotely, making it feasible to live in regional areas while maintaining their careers. This flexibility enables buyers to enjoy a better lifestyle balance without sacrificing their job connections in Melbourne. For investors considering buying in Regional Victoria, and concerned that prices have not increased recently, it’s worth remembering that longer term Victoria has an exceptional track record on capital growth. Regional Victoria ranked fifth in the nation in the recent PIPA research into where the best capital growth has occurred in the past 20 years – ahead of Perth, Sydney, Melbourne, Canberra and the regional markets of NSW, Queensland and Western Australia. According to the PIPA research, home values in Regional Victoria grew 187% over the past two decades. Another factor in favour of investors is that Victoria’s rental market is shrinking, which means there are fewer vacant properties. New data from Victoria’s Department of Families, Fairness and Housing reveals a sharp contraction in the state’s rental market, with active rental bonds dropping by 21,712 in the year to June 2024. This marks the first decline in recorded history since 1999, representing a significant shift in market dynamics. PropTrack has attributed much of the contraction to Victoria’s rising property taxes, stricter rental standards and sustained high interest rates, which has made rental property ownership less attractive and more expensive for landlords. While around 50,000 new loans were made to investors during the 2024 financial year, PropTrack noted that the influx was insufficient to offset the exodus, leading to a net loss of rental properties. The data also indicated that the churn rate for sales by investors was significantly higher than a typical year, further intensifying the decline. While there are clear reasons why investors have been deterred from investing in Victoria, the trends present opportunities for investors who are interested in Regional Victoria’s long-term growth record, its relative affordability and the growing shortage of rental properties. /episode/index/show/hotspotting/id/34298515

Units Beat Houses 12/05/2024

Units Beat Houses Hotspotting was among the first to identify and highlight the most significant change in the Australian real estate scene – the emerging trend which we document in the quarterly editions of the report titled The Rise and Rise of Apartments., published in association with Nuestar. This trend has turned upside down the dominant paradigm in real estate, that houses out-perform apartments on capital growth. There is now growing evidence that attached dwellings are mounting a strong challenge to houses. It has long been believed that land content was the big thing in driving property values and that units lacked this quality. Increasingly, it’s clear that this theory about capital growth needs to be re-considered and to acknowledge that attached dwellings like apartments have qualities that houses don’t have and which are important to growing numbers of buyers. The latest Housing Affordability Report, jointly released by CoreLogic and ANZ, has observed that capital city unit prices increased more over the three months to October 2024, than did house prices over the same period, suggesting a growing preference among home-buyers and investors for units as an affordable option in getting into the market. The growth difference was small, but it’s merely the latest in a growing set of figures showing the rising performance of units. In the month of October, the median price growth for units was higher than for houses in the nation’s five biggest cities and also for the combined regions. This was also the case for the October quarter. In annual terms, price growth has been better for units than houses in the three capital cities leading the nation on market growth – Brisbane, Adelaide and Perth. Units have also out-performed in the regional markets of Queensland, WA, NSW and Victoria. The annual growth in median unit prices, according to CoreLogic, has been 18% in Adelaide, 19% in Brisbane and 24% in Perth. Those are spectacular increases and provide compelling evidence to disprove the notion that attached dwellings don’t perform on capital growth. There are also growing numbers of suburbs around Australia where unit price growth is higher, both in the short-term and the long-term. The Hotspotting Research Hub shows that at Noosa Heads on the Sunshine Coast, the five-year growth average is 10% per year for houses and 17% per year for units. At Surfers Paradise on the Gold Coast, it’s 8% per year for houses and 12% per year for units. There are many other similar examples across the nation. REA Group, which publishes realestate.com.au, has recently highlighted locations where unit price growth is outpacing houses. “Historically, house values have risen at a faster rate than units, but with affordability pressures, units are being preferred by many homebuyers.” “In certain suburbs,” she says, “unit prices have grown at more than double the rate of houses over the past year.” Searches for units on realestate.com.au have also been trending upwards since mid 2020. They now make up close to 40% of all buy searches on-site. Lieu says that, while the strong performance of units has been evident nationwide, there are areas where demand for units has been particularly high, resulting in significant price increases compared to houses. In New South Wales, for example, the annual growth in unit values in , and has outpaced houses by around 6 percentage points. In Victorian, , and are examples of locations which have experienced stronger growth in their values compared to houses by considerable margins. The largest difference in value growth between units and houses in Queensland was observed in the Brisbane suburbs of , and . Units in Waterford and Waterford West increased at more than twice the percentage of houses in these suburbs in the past 12 months. PropTrack says that, with housing affordability at its lowest level in three decades, it's to be expected that people are turning to more economical options, especially in suburbs where the gap between house and unit values is significant. But Hotspotting analysis shows that affordability is NOT the only reason that demand for units is rising. More buyers are choosing attached dwellings for location, for lifestyle and also for safety and security at a time of growing concerns about escalating crime levels. For all those reasons, each quarter Hotspotting publishes a national report titled The Rise and Rise of Apartments, in association with the leading real estate marketing company Nuestar. And it proves, emphatically, the units are now a strong option for buyers seeking not only affordability, but strong capital growth as well. /episode/index/show/hotspotting/id/34298455

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