With property prices falling in Sydney and Melbourne but growing strongly in other parts of the country, and a sharemarket that has dropped sharply, this will be a tough year for investors.
But there are still pockets of value.
Property winners in 2018 included Newcastle and its neighbours (up to 20%) in NSW and Ballarat (up to 15%) in Victoria, and then there’s Queensland.
Brisbane hasn’t joined the Sydney/Melbourne boom because it has lacked the growth drivers evident in the biggest cities.
But many of the ducks are falling into line for Brisbane, with the underlying economy stronger, population data favouring south-east Queensland and infrastructure spending picking up. Big-city investors are looking for alternatives to the Sydney and Melbourne markets and Brisbane presents favourably on pricing and yields.
The cheaper local government areas such as Moreton Bay in the north, Logan in the south and Ipswich in the south-west should be busy this year.
The inner-city apartment market still needs to be approached with caution. Early in 2019 vacancy rates (according to SQM Research) were 9% in the Brisbane CBD, 6% in Fortitude Valley, 5% in Kangaroo Point and Woolloongabba and 6.5% in South Brisbane/West End.
The best prospects will be in regional markets. The Sunshine Coast is currently the strongest market, with many suburbs recording price growth above 10% last year, led by top-end locations such as Minyama, Sunshine Beach and Noosa. Expect the more affordable areas to grow well in 2019, as the impact of the big infrastructure spend ripples through.
In 2018 we saw the first tangible signs of recovery in centres impacted by the resources sector, led by Mackay. Others showing promise include Emerald, Rockhampton, Moranbah and Dalby, although these areas can be volatile.
Bigger and more diverse cities such as Toowoomba and Cairns should put in a solid performance.
For full coverage of Money’s top 50 share buys and property hotspots, pick up our February issue, on sale now