The Watch List for 2020
BOOM TOWN 2020
Let’s look into the property crystal ball for 2020…
It’s a new decade and while there’s no get rich quick property investing schemes (is there ever really?), there are definitely some key areas to look at for long-term growth.
Society wide, there’s a trend towards optimistic futures. With the last decade plagued by unsettling economic, political and environmental concerns, people have been feeling more anxious than ever – 5.6 million Aussies are stressed. But the idea of a new decade (combined with an interest rate cut) is propelling society to move forward and feel a little more optimistic.
This is great news for the property market, it means people may be willing to take a chance, instead of sitting tight and squirrelling away for a rainy day.
And this definitely seems to be the case for the opening 2020 Sydney property market. Buyers are attending open homes in droves, ready to jump on into the bricks and mortar investment arena.
When it comes to choosing the right location, overall, you should be looking out for locations where there’s key spending on infrastructure, particularly transport, hospitals and universities. This spending is one of the biggest factors that contributes to a market’s growth.
Let’s take a glance at each market, city by city.
It’s been quite the ride for Perth property investors, but it’s slowly recovering and will be a solid market to watch or invest in this year. Both the housing and unit market is expected to grow. Some key locations to consider are the CBD, East Perth, Northbridge, Scarborough, Carine, Yokine and Subiaco. The strong performer Stirling will continue to be a market leader. If you’re looking for a rental home, you should consider Balga, Nollamara and Westminster with medium rental returns of 5.1%, 4.7% and 4.7%, respectively. Units and apartments may deliver a higher rental return of 6% plus in Subiaco, Scarborough and typically the CBD.
The potential construction of a light rail system that will connect Scarborough Beach and Stirling City Centre and the CBD is something that will positively impact the market. Keep an ear to the ground for the latest developments. Scarborough is my HOT TIP for 2020 folks.
The Sydney train just really doesn’t slow down. The housing market will likely achieve in excess of 10% growth this year, so if you can, get in now, before the prices increase even more. Apartments will also see good capital growth. Areas to consider include the Inner West, Inner City, Eastern Suburbs and Lower North Shore. Serious hotspots are St Peters, Surry Hills, Kensington and the Hills District. Watch out for Marsfield and Cherrybrook as sweet HOT SPOTS.
There’s still considerable spending on infrastructure in Sydney with massive investment in new rail links, motorways, tunnels, hospitals and universities. This investment continues to feed economic activity and employment creation, that’s ultimately propelled the property market forward.
Steady growth is expected for Brisbane too. The growth areas are stretching to areas beyond 20kms of the radius of the CBD. Areas 50km north of the CBD are also expected to grow. If you’re an investor looking for an affordable entry price and high rental yields, consider Woody Point (+8%), Straphpine (+7%), Bray Park, Burpengary East, Murrumba Downs, Narangba and Petrie (all up +5%).
Some projects expected to boost growth include the new University of The Sunshine Coast Moreton Bay campus (expected to open in 2020), the Moreton Bay Rail Link, North East Business Park and the proposed Caboolture West Master Plan expected to accommodate 70,000 residents.
If you’re looking for long-term growth, take a look at some locations around 10-15kms north of the Melbourne CBD. Property sales in areas such as Fairfield, Preston and Reservoir have had fairly consistent growth where some other areas have fallen in recent times. The unit price for Northcote has risen by 9% over the past year to $570,000, while Coburg is up 5% and Thornbury is up 5%. The annual growth of house prices in Darebin has consistently grown for the last 10 years by 7-8%, so this suburb isn’t a bad option either.
There’s set to be an influx of government services, employment opportunities, housing and public transport with the State Governments inclusion of the suburbs of Preston, Northcote and Reservoir as part of its Northern Major Activity Centre infrastructure project.
There are quite a few strong performers outside the city in Adelaide. Broadview and Gilles Plains recorded median house prices increases of 9% in the past year, now at $565,000 and $400,000, respectively. Greenacres, Hillcrest and Semaphore Park house prices have all gone up by 6%. If you’ve only got a little bit of capital to get you started, you could look at investing in Ashford, where units are going for sub-$250,00 and returning a 6.4% rental yield. Walkerville is another strong performer with units in the $300,000 area offering a rental yield in excess of 7%.
The Federal Government’s $89 billion shipbuilding plan, which includes an upgrade to the Osborne Naval Shipyard will likely fuel growth in the Adelaide market. There are also two large residential projects are also in the pipeline and are set to deliver 1,800 new homes.
We’ve saved the best for last, for all your savvy investors eating up property knowledge with your morning breakfast. According to propertyology MD Simon Pressley, Hobart is the strongest contender of all the capitals. The city’s been a great performer over the last 5 years, with a growing economy, work opportunities and affordable housing prices.
Launceston has also been performing particularly well for 18 months. Aside from the growing hospitality sector, there’s also the construction of a new university campus in Launceston, which is expected to boost the market even more.
So, there you have it!
Some exciting areas to consider for 2020. I’ll pop my crystal ball away for now.