You’d be excused for thinking that the property market in Australia is all doom and gloom. We’re hearing about reductions in price, the Sydney market falling and so on, but you’re going to be really surprised to hear a report that we’ll be talking about that reveals double-digit price growth has been produced in one in every eight locations across Australia. You heard right: one in every eight locations.  Simon Pressley has that story.
Transcript:
Kevin:  You’d be excused for thinking that the property market in Australia is all doom and gloom. We’re hearing about reductions in price, the Sydney market falling, and so on, but you’re going to be really surprised to hear a report that we’ll be talking about in this interview that’s come out that reveals that double-digit price growth has been produced in one in every eight locations across Australia. You heard right: one in every eight locations.
This is not a great surprise to the people who put the research together. One of our supporters and people we feature regularly in this show because they know what they’re talking about, Propertylogy’s Simon Pressley joins me.
G’day, Simon.
Simon:  G’day, Kevin. Always good to chat.
Kevin:  In your chat with me before this interview, you mentioned that it’s not really a surprise to you because you are focused very much on this ongoing, aren’t you?
Simon:  Yes. In any calendar year really, the official data today, one in eight locations across Australia, double-digit price growth as we said, but that’s probably lower than normal, in all honesty.
But why we’re sharing this data is because I think so much of the broader property media hovers around whatever is happening in Sydney or Melbourne at any given time, good or bad, and because our two big cities, their growth cycles are now behind us. I think a lot of the Australian public thinks that is a reflection of what’s happening right across the country, but it’s definitely not.
Kevin:  Is this largely in regional markets, or are there some cap city markets or suburbs that have improved well into double-digits?
Simon:  There’s double-digit growth in some capital cities and some regions, but overwhelmingly, Kevin, regions are the winners. And on this show several times over the last couple of years, we have been deliberately trying to share with people lots of information about regional Australia because we’ve felt for a couple of years that the best opportunities are going to be not in all regions, but if you know what you’re looking for, that’s where the real growth we felt was going to be.
45 out of the 67 locations in Australia that had double-digit price growth over the last 12 months were in regional locations, so that still means there were 18 capital city locations with double-digit price growth. But 45 out of 67 in regional Australia, and we expect that trend to continue for a good few years.
Kevin:  What about state by state, Simon? Were there any states that really stood out?
Simon:  The biggest beneficiary was Victoria. It had 28 locations with double-digit price growth, and 16 of those are in greater Melbourne. These locations, Kevin, we broke Australia up into each city council. So, there are 550 city councils in Australia and 67 of those had double-digit price growth last year, 28 in Victoria, and of those, 16 were in greater Melbourne.
And no surprise to us that most of those greater Melbourne locations were on the outskirts of greater Melbourne where housing is more affordable.
Kevin:  There’s a special blog on Propertyology’s feature channel on RET. We’ll put a link to the article inside this commentary down below in the transcript section.
What about some of the other states around Australia, Simon?
Simon:  New South Wales had 27 locations of double-digit price growth, and 24 of those were in regional New South Wales – 24 out of 27. South Australia featured quite well: four locations there, and three of those were in regional South Australia.
Tasmania: we’ve known for a good couple of years that Hobart is our hottest market. There were four parts of Hobart with double-digit price growth, but also three locations in regional Tasmania with double-digit price growth.
Western Australia only had the one: interestingly, Karratha. Median house price increased by 13.5%. We know Karratha had a nasty decline when the mining boom came to an end. And we’ve known for a couple of years that mining in general has been showing some solid recovery. Western Australia has seen it.
Nothing in Queensland, unfortunately, Kevin. It continues to disappoint us, capital city and throughout regional Queensland for too many years, to be frank.
Kevin:  Well, you know, in defense of Queensland, I think one thing about the Queensland market is it continually just improves at a fairly moderate rate. I think around maybe 6%, which is still quite reasonable. We don’t get the highs and lows.
You probably don’t agree with that, Simon, but that’s my view.
Simon:  Disappointing. It’s always had a lot of potential, strong fundamentals. The state lacks confidence, it lacks significant investment in infrastructure, and until those two things combine, the buyer public won’t have the confidence required for some decent returns as investors.
Kevin:  Fair enough. One of the big drivers behind this, of course, is employment. And we see employment come for different reasons, like tourism, health, agriculture, infrastructure, and so on. What were the standouts for you?
Simon:  We talk about property economics on this show all the time, don’t we, Kevin? The real thing… We’ve always had this fascination with the Asian Century. It’s what caused the mining boom. It’s what caused Sydney and Melbourne’s boom. It’s what’s been the catalyst for Hobart’s remarkable turnaround, and it’s also what’s unfolding throughout parts of regional Australia.
The Asian Century is a massive phenomenon where 2.5 billion people over a short period of time are going from poverty to middle class, and how that affects Australia’s property markets is the different industry sectors that expand and create more jobs, which leads to confidence, salaries, people migrating from one location to another.
One or another causes pressure to rise on property or pressure to fall on property, and regional Australia is a big beneficiary.
Kevin:  Always great talking to you, Simon Pressley. And don’t forget: use this link to that blog article on Propertyology’s featured channel on Real Estate Talk.
Simon Pressley, thank you so much for your time.
Simon:  Thanks, Kevin. Talk again soon.