Hyperbole around falling home values in Australia’s two most populous cities makes it easy to forget that conditions in Sydney and Melbourne don’t dictate prices for the rest the nation.
Across Australia, perennially underrated cities and towns are defying the major cities’ downturn, and investors are taking notice.
‘National’ home values (an aggregate of capital city home prices) fell by 4.8 per cent in 2018, a headline figure you would be forgiven for thinking correlates with price falls in most capitals.
In fact, four of the eight capital cities (Brisbane, Adelaide, Hobart, and Canberra) defied the negative headline trend.
In January, however, a consumer survey by Westpac and the Melbourne Institute showed that sentiment around housing remained pessimistic.
“Purchasing a residential property is one of the highest commitment decisions a household will make and low levels of confidence are likely to continue to dampen housing demand,” CoreLogic head of research Tim Lawless said.
For savvy buyers undeterred by negative headlines, though, experts say that means opportunities.
“With stock levels remaining elevated, buyers will be in the driver’s seat when it comes to choosing a property and negotiating on price,” Mr Lawless said.
These are just some of the cities, towns, and suburbs defying the property downturn in 2019.
Tasmania’s food bowl booms
Home prices across Australia’s southernmost state are soaring.
Regional Tasmania and Hobart – where prices rose 8.7 per cent in 2018 – are “standouts for capital gain”, Mr Lawless said.
With local and international demand for high quality produce increasing, the state’s ‘food bowl’ of Launceston and North East Tasmania began to boom in 2018 – home values rose 11.4 per cent, and price growth isn’t expected to end anytime soon.
The New Daily contributing editor Michael Pascoe wrote recently about the state’s astonishing transformation.
“Rental vacancies in Hobart are so low as to be within the margin of error – no wonder building approvals and housing prices are still rising there as they fall elsewhere,” he said.
Indeed, the state is home to eight of the ten fastest selling suburbs in Australia, research by RiskWise Property Research shows, with houses snapped up in within days of being listed.
“Around the country there are places like Hobart that have been quiet for a long time but suddenly everyone realises ‘hey it’s a good place, we should go there,” The Property Mentors chief executive Luke Harris said.
“Tourism’s increasing, there’s been infrastructure investments, and people have discovered it again.”
Regions roar ahead
Regional towns and ‘second cities’ are roaring ahead of many of their capital city counterparts.
Over the past year, areas such as Mackay in Queensland, Geelong in Victoria, and New South Wales’ Riverina region have seen property prices soar thanks to thriving local economies.
Australia is “blessed with around 40 mini-capital cities” where strong local economies are fuelling population and home price growth, Propertyology head of research Simon Pressley said.
Growth in education, tourism, infrastructure and business can indicate that a regional hub is on the brink of a housing price explosion.
“Regional Australian tourism is exciting, and already expanding at a greater rate than capital city tourism. And universities aren’t just in capital cities,” Mr Pressley said.
Mr Pressley also tracks the number of passengers travelling in and out of regional airpots across the country.
“People fly somewhere because they want to go holiday or do business, either way it has a positive impact on the economy,” he said.
“Too many people spend their lives living in a concrete jungle, and have a misperception about life outside a capital city.”
Longterm view key for Sydney and Melbourne
Current owner-occupiers in Sydney and Melbourne looking to trade up or downsize shouldn’t be deterred by falling home prices, Mr Harris said.
While both housing markets are undergoing corrections after years of soaring prices, Mr Harris said that trying to time the bottom of the market can mean missing out on a dream home.
“Prices in Sydney and Melbourne overshot what their true value was. In many good suburbs, though, you’ll notice that homes are maintaining their value,” he said.
Buyers in Sydney and Melbourne should “drill down” into the specifics of their preferred suburbs, he said, and select a well designed property in an area ripe for future price growth.