I’m not a betting man at all. The closest thing I get tor having a punt is participating in a footy tipping competition each year. We all know that each year seems to produce one or two teams that make an unexpected rise up the ladder.
While acknowledging a very real confirmation bias, I think that the Brisbane Lions, who have languished right down the bottom for far too long, might be one such footy team in 2019.
As I count down the days until that first bounce of the football for Round ONE of the season, I thought I’d quench my thirst by trying to tip a few Australian property markets that have the potential to go from wooden-spooners to finals contenders in 2019.
In the premiership stakes, I reckon that battle will be contested by the likes of Launceston, Orange, Noosa, Mackay, Ballarat, and Mildura.
As for the 2019 title for ‘Australia’s most improved property market’, when the data answers this question for us twelve months from now, there’s a long list of candidates.
Improvement doesn’t occur by accident. Whether a sporting team, a business, or an individual property market, we often see situations where results quickly go from a prolonged period of disappointment to suddenly impressing. That improvement comes after a considerable amount of good work behind the scenes.
Right across Australia, in 2018 we saw visual evidence of many non-capital city property markets performing well. Many would be surprised by those results and find themselves scratching their head as to how it happened. In a majority of cases, the primary driver was related to economic development activities from prior years that is no starting to produce tangible benefits for these communities.
The list of locations that will be big improvers this year is an incredibly long one. Nonetheless, below are my tips for ‘2019 Most Improved Property Market’ for each state.
NEW SOUTH WALES – PARKES
Median House Price: $250,000
Population: circa 15,000
Economic Profile: Australia’s 138th largest settlement plays an important role in science and astronomy and has previously assisted NASA with various space missions. There are reserves of precious metals such as gold and copper within the region (mining represents 7 per cent of Parkes’ workforce). Wheat, cotton and livestock are the backbone of its important agriculture sector.
Property Growth Drivers: With Parkes’ median house price only increasing by 11.1 per cent over the last 5 years, it’s certainly been quite some time since it experienced a growth cycle. Propertyology’s analysis suggests that growth cycle may well have commenced in late-2018. Vacancy rates have been declining and currently sit at 1.1 per cent plus there was an 18.4 per cent increase in house sales over the year ending October 2018. Construction is currently underway for a transport logistics hub in Parkes that will form part of the federal government’s $10 billion Melbourne-Brisbane Inland Rail Project.
QUEENSLAND – MOUNT ISA
Median House Price: $255,000
Population: circa 19,000
Economic Profile: Mount Isa services the Gulf Country in north-west Queensland; one of the most productive mineral deposits in the world (zinc, silver, copper and lead). While the economy lacks diversity – 1 in every 3 people employed in Mount Isa are in the mining sector while others are employed in related smeltering and logistics roles – Propertyology believes that the region is entering a prosperous era.
Property Growth Drivers: World demand for mining commodities has increased significantly over the last few years and a new mining cycle is underway. Existing mines in the region have been increasing production again while exploration for new mines is also on the rise. Consequently, properties in Mount Isa sold much quicker over the last 12 months (38 days on average, compared to 77 days in the prior year) and vacancy rates tightened over the year from 3.1 per cent to 2.1 per cent. The increased buyer activity will have significantly fewer dwellings to choose from, with listing volumes as at October 2018 9.2 per cent lower than a year earlier.
SOUTH AUSTRALIA – WHYALLA
Median House Price: $150,000
Population: 22,000 (South Australia’s third largest settlement)
Economic Profile: With valuable deep-sea port infrastructure and rail links to the nearby iron ore mines along Middleback Range, Whyalla is a major steelmaking city that has a niche in railways. Fishing and the Whyalla maritime museum attract tourism trade. More than 20 per cent of local jobs are in manufacturing with the steel factory unquestionably being critical to the city’s economy. Rising costs and a commodity price downturn put the future of the factory at risk a few years ago and UK billionaire, Sanjeev Gupta (Liberty House), purchased it from Arrium (a spin off from BHP) in late-2017.
Property Growth Drivers: From potential extinction three years ago to now plans for investing $billions to develop the world’s best steel plant, a major renewable energy project, large horticultural facility and a major hotel. Gupta’s vision and dollars have the community now projecting a quadrupling of its population over the next 10 to 20 years. Whyalla’s property market shed more than 30 per cent over the last 5 years and, while it fell again last year, I wouldn’t be surprised if it produces one of Australia’s biggest turnarounds in 2019. Vacancy rates were off the charts a few years back, but they’ve fallen sharply of late (currently 2.9 per cent) and houses are selling quicker.
TASMANIA – BURNIE
Median House Price: $240,000
Population: circa 19,000
Economic Profile: Burnie is one of the 40-odd regional locations that Propertyology refers to as a ‘mini capital city’, meaning it has all essential infrastructure and it plays the role of a major service centre for a region much bigger than its own city. The region’s most important industries consist of manufacturing, tourism, agriculture plus a number of small mines in the north-west. Burnie is Tasmania’s most productive port where exports of agriculture, forestry and mineral products is growing significantly.
Property Growth Drivers: Tasmania’s economic revival is arguably the single biggest success story in Australia in decades. While Hobart’s property market boom of the last 3 years has been well documented, Launceston went ballistic last year, and 2019 may well be when Burnie also takes off. The local tourism trade (including cruise ship volumes) keeps strengthening, construction of a new university will get underway this year, commencement of the development of a new timber mill is imminent, and local mines are employing. 2018 produced a 6 per cent increase in house sales volumes and supply is tight.
VICTORIA – BAIRNSDALE
Median House Price: $300,000
Population: circa 15,000
Economic Profile: Bairnsdale is a township within Victoria’s East Gippsland. It’s picturesque surrounds and food experiences support domestic tourism. Health and manufacturing (timber and food-related) are important sectors.
Property Growth Drivers: Melbourne’s bulging population and housing affordability pressures have already pushed property prices up in the likes of Geelong, Surf Coast, Ballarat and Warragul. In 2019, the ripple may continue east, as demand for Bairnsdale’s lifestyle and affordable housing picks up. Vacancy rates are already sub 1 per cent, the region produced a 10 per cent increase in house sales volumes last year, and they are selling quicker.
WESTERN AUSTRALIA – BUNBURY
Median House Price: $300,000
Population: circa 32,000
Economic Profile: Bunbury is a port city and major service centre in southern WA. Its skilled workforce is employed in a diverse range of sectors including construction, agriculture, mining, and forestry related roles while retail, health and education are also important.
Property Growth Drivers: Other than a 3 per cent increase in house sales volumes last year, property-specific metrics do little to inspire confidence for Bunbury. But the full property is story is never told from property numbers. The city is about to benefit big time from a world-wide battery boom. US resources giant Albemarle is due to begin construction of a $1 billion lithium processing plant in early 2019, creating an estimated 500 jobs. Lithium will be transported from the region’s Greenbushes mine, also undergoing a $1 billion expansion.
In a country with 180 individual towns and cities that have a population of 10,000 or more, it was no easy exercise to narrow it down to ONE location per state that will show the biggest improvement in 2019.
Several locations will produce higher growth in 2019 than those listed above. I anticipate that most states will have half a dozen or so locations that will improve significantly over these next couple of years. And, as we see with footy teams, some develop quicker than others. But, progress is inevitable when a good foundation has been laid.
Propertyology is a Brisbane-based buyers agency and (national) property market research firm. We help everyday people to invest in strategically-chosen locations all over Australia. Testament to our multi-award-winning success is Propertyology’s expertise in being the only company in Australia to forecast Hobart’s remarkable resurgence and begin investing there in mid-2014, before the boom. Now, our buyer’s agents are actively investing in a few different locations. Contact us here.