For homebuyers and investors contemplating lifestyle hotspots, the frenetic nature of many markets can be unnerving.
One of the questions real estate consumers are asking about popular lifestyle locations is whether it’s too late to buy here or if there’s more growth to come?
The bad news is that the capital gains boat has sailed for some of the nation’s most iconic markets.
The better news is that we don’t have one consistent unified market in Australia and, while some locations have passed the peak of their markets, others are early in the cycle and offer possibilities for capital growth. It’s important to be able to distinguish between the two.
While it may appear that Australian markets are rising in unison, the reality is that there are many different markets across the nation, all marching to their own cyclical drums. Let’s take a look at the prospects for some of the top lifestyle locations.
New South Wales
Perhaps the most high-profile and spectacular of the lifestyle boom markets is Byron Bay. Here the median house price has lifted 51% in the past 12 months to $2.625 million. But this has been a growth market for a long time. The median price has increased 162% in the past five years.
Too late to buy in Byron Bay? Yes, the ideal time was five years ago.
But Ballina, about 35km south of Byron, presents an alternative that’s more affordable and not so advanced in the growth cycle. Ballina prices have increased 36% for houses to $750,000 and 23% for units ($570,000). But most of the growth has occurred in the past 12 months and there’s potential for more.
Further south, Port Macquarie presents another possibility where prices are more attainable and the growth to date has been relatively muted. In the past three years, its median prices have risen just 16% for houses ($670,000) and 15% for units ($445,000). There’s potential for markets like Port Macquarie to be targeted by buyers priced out of Byron Bay – and its economy has some depth beyond tourism and retirement.
Noosa Heads on the Sunshine Coast is another celebrated lifestyle destination that has been booming for several years. The median house price ($1,500,000) has almost doubled in the past five years, including 31% growth in the past 12 months. Apartment prices have also risen, with the median increasing 64% to $1.1 million in the past three years.
Neighbouring Sunshine Beach has added 107% to its median house price ($2,100,000) in the past five years and that thoroughbred market has well and truly bolted.
This reflects the Sunshine Coast market overall – it has been a compelling growth centre for three or more years and the evidence suggests that it has passed its peak – for now.
But an alternative to the sea change locations on the Sunshine Coast is the hill change towns in the region’s hinterland. The popular weekender destination Maleny has only recently joined the growth trend, with a 21% rise to $770,000 in the past 12 months but only moderate growth in the preceding three to four years. There’s a similar pattern with nearby Montville and Mapleton. The rise in these markets, boosted by buyers from Sydney and Brisbane, is relatively recent and further growth is likely, under the persistent influence of the ‘Exodus to Affordable Lifestyle’ trend.
The town of Gympie – a little north of the Sunshine Coast – presents an affordable alternative. Its median house price has increased 43% in the past five years, with most of that growth occurring in 2021 – it’s now $340,000. Gympie sits amid attractive hill change country and the municipality also has some sea changes towns, all at prices less than half those on the Sunshine Coast.
Further north, the key regional city of Bundaberg started on a growth trajectory a year ago, with many of its suburbs priced in the $200,000s. The nearby seaside town of Bargara has potential for more growth, having increased just 19% in the past three years and with a median house price of just $460,000.
Regional Tasmania has been a particular target for both homebuyers and investors, especially for buyers out of Melbourne. In the 12 months to November 1, median prices in Regional Tasmania have jumped 30% for houses and 23% for units.
The market in Launceston has had wonderful growth for five years. Most suburbs have risen 60%-65% over five years, including more than 20% in the past year. This market was targeted by buyers drawn by the attractive affordability, but now many suburbs have median prices in the $400,000s and $500,000s and most of the bargains have gone.
Hobart was previously the cheapest capital city for houses, but now its median price ($725,000) is much higher than those for Perth, Adelaide or Darwin, and on a par with Brisbane. It has the most expensive apartments in capital city Australia, except for Sydney and Melbourne. Hobart has had a remarkable rise over the past five years, but the evidence suggests it has passed its peak. That ship has sailed over the market horizon.
The popular suburb of Bellerive has grown 82% in the past five years and now has a median house price of $825,000.
Humble Moonah, once a place investors targeted for houses in the $200,000s and $300,000s, now has a median house price of $555,000, having almost doubled in the past five years.
Rokeby is another former cheapie, where the median house price has lifted 121% in five years, including 52% in the past three years and 23% in the past 12 months.
There’s a similar story for the regional markets which have led the surge in Victoria, including Geelong and Ballarat. Those markets are still strong, but the smartest investors bought there five years ago.
Buyers are now looking further afield in Victoria. Warrnambool has had good growth in the past year but is just getting started. Its median price has increased by 41% in five years, but 18% in the past year and is on a growth path, boosted by its appealing seaside setting and its strong local economy and infrastructure. Typical pricing is around $450,000 for houses and $350,000 for units.
Mildura is another important regional city that is still only jogging along a growth path. Its current median house price ($350,000) is up 36% over five years, including 10% in the past 12 months. In the current climate, those numbers are rather muted, with better to come.
The Latrobe Valley towns have all lifted more than 20% in the past 12 months but there’s scope for more growth, because towns like Morwell, Churchill and Moe still have median prices in the $200,000s. Morwell has jumped 24% in the past year but the median house price is still only $235,000.
Shepparton, too, has potential for further growth. Its market has risen 26% in three years, but most of it in the past 12 months (up 18% to $340,000). This is a key regional city at the heart of one of the nation’s leading food bowls, with a big infrastructure spend underway. There will be more growth.
Median price and growth figures in this article are sourced from CoreLogic as at September 2021, unless stated otherwise.
Cover image source: Dennis Diatel/Shutterstock.com
About Terry Ryder
Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.
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