For the last eight years, Sydney & Melbourne have had astounding real estate growth. But real estate experts in the land down under say those areas may have peaked out, and inner suburbs of Brisbane and Adelaide may be the next hot area for real estate. New projects are expected to increase jobs in those areas, and with prices rising in Sydney, the areas of Brisbane and Adelaide are more desirable both from a price and nearby jobs standpoint.
People who bought real estate in the city, or even suburbs of Sydney and Melbourne eight years ago or more have seen property values skyrocket. So much so in fact, they are now saying first time home owners may be priced out of the market.
Consultant organizations Meridian Australia and Property Performance Advisory note that middle priced properties in Sydney increased by 80 percent from 2008 to 2015, but incomes were far below that pace. Their research showed that in 2001 Brisbane housing cost half what it cost in Sydney and this is why they are saying Brisbane may be the next hot spot. In 2008, that percentage had changed to 78. With Sydney’s incredible growth in values, that percentage is back to around 49 percent. The believe developers will seek areas like Brisbane as they think Sydney may have peaked out for awhile.
Even if Sydney and Melbourne’s housing may be getting too expensive, real estate experts are predicting a boom in apartment developments. They say 200,000 new apartments may be built in the two cities, but this could drive prices down, or it could help as people priced out of the house market flock to the less expensive apartments and condos. Again, an expected increase in jobs is driving the expected growth. But it is Brisbane that could be the hottest area in coming years, so it might be a better long term investment. Prices there are not yet to the high level of Sydney, so there is plenty of room for growth.
Areas around Brisbane, such as Holland Park and Stafford, and even Everton Park to the south, are all expected to grow in coming years because of expected increases in jobs. A tunnel has been proposed near Everton Park that would connect it to the central business district of Brisbane, making it much more convenient to commuters, and making it a more desirable place to live. Holland Park is also primed for growth as it is near the central business district, but close to new hospitals and schools.
South Brisbane, with the Brisbane River, green spaces and solid employment opportunities, is also primed for a real estate boom. The infrastructure is in place, there is plenty of land for sale, and people are looking to find places outside of the central business district. That makes South Brisbane very attractive for investors and developers. South Brisbane is the most sought after area according to how many make searches on the Internet, but West End, New Farm, Indooroopilly and Toowong are also right up there as areas developers might like to explore. There are also a lot of big infrastructure projects planned, and those could create a lot of jobs around Adelaide, making it also an area that might be good for real estate developers. For the upper middle class, there is a rise of suburban homes with large lots, or significant pieces of land attached. In the Sunshine area of Melbourne, there is such an area with homes on large tracts of land. The median price is $570,000, which is less than Melbourne.
But even with the growth of Melbourne and Brisbane, and the inflation of housing in Sydney, that does not mean Sydney is no longer a good investment. It is just a slight shift in focus for Sydney. Suburbs of Sydney like Parramatta, and Blacktown, are places a lot of people are looking to move. These might also be good places to sell if you own property there, as there are people looking in these areas and higher prices in Sydney should make prices higher here in the suburbs as well. According to research done by ealestate.com.au, Parramatta and Blacktown are the areas being searched for most by people looking for upscale housing in the Sydney area. The western Sydney area then, is likely to be a hot spit in coming years. Parramatta has great public transportation, and good highways, making the trip into Sydney easy. There is also a light rail service in the works, and that will make Parramatta even more accessible and desirable.
So while prices are rising some, there is plenty of demand. It might be a good time to sell, but it could also be a good time to buy. The buyers market is more in the suburban areas where there is job growth and new developments. With more people looking to the West Sydney area, and less to the downtown Sydney area, the west is primed for a real estate boom. Sydney prices have risen a lot, and it is a good time to sell. Renting is an option, to hold out for a higher price, but how much higher prices will go is hard to say. Another independent mortgage watching company notes that New South Wales is where the most real estate activity is happening at the moment. In the short term this makes this area attractive. According to the Australian Bureau of Statistics, every state had a strop in investment loans early this year except for New South Wales.
As for foreign developers, China is by far the largest, with the United States and Singapore second and third. In 2014 and 2015 China invested $24 billion in real estate. The investors from the United States were second at around $8 billion. Chinese investors doubled their investment over the previous year. Many of them are building apartment complexes. National stats show 19 percent of all apartments built in Australia are owned by Chinese, and 15 percent of the new homes built are also Chinese. Australian law does not allow foreign investors to buy existing homes. Victoria is the area with the most Chinese investment, with 28 percent of new apartments and 25 percent of new homes built going to Chinese developers.