There are still property investment opportunities despite recent price hikes, according to Ray White’s chief economist, Nerida Conisbee (pictured above).
Conisbee highlighted several property types and regions that present notable prospects in the current market.
With construction costs for new apartments surging, existing apartments offer attractive value in many suburbs.
In cities like Brisbane, apartment prices are rising faster than house prices. For example, in Brisbane’s inner areas, house prices have gone up by 7.4% over the past year, while unit prices have surged by over 11%.
Areas with limited new apartment development may offer better growth potential, although high supply doesn’t always suppress price increases, as seen recently on the Gold Coast, where apartments continue to outperform houses in growth.
The cost of building and renovating homes has risen significantly in recent years, with building costs up over 40% in many regions.
However, some material prices are starting to fall, especially for timber and steel, though brick prices remain high. This trend has created a larger price gap between renovated and unrenovated homes.
For those willing to wait for construction costs to stabilise, or with the skills to take on renovations, buying an unrenovated property could be a worthwhile investment.
Melbourne’s market faces challenges, particularly with high debt burdens affecting property owners. Desirable suburbs like Malvern East, Hawthorn, and Caulfield are experiencing price drops.
However, the long-term outlook remains promising as Melbourne continues to attract international migration and was recently named Australia’s most liveable city.
Conisbee anticipated that a future interest rate cut and economic recovery could reinvigorate the market, positioning Melbourne for renewed growth.
The region spanning south-east Queensland and northern New South Wales, including cities like Gold Coast and Byron Bay, remains a robust market. Population growth, limited new housing, and an increasingly diversified economy are fueling demand here.
While not yet as expensive as Sydney, parts of this area now surpass Melbourne in cost, with prices expected to continue rising.
Perth’s market, known for its boom-and-bust cycles, has shown exceptional growth in recent years. Though some attribute this to speculation, Perth’s rental market also shows the strongest growth nationally.
Despite fluctuations in resources like iron ore and lithium, rising construction costs in Perth mean property values could still increase.
While most Australian markets see stabilising construction expenses, Perth’s building costs have re-accelerated, supporting continued upward pressure on home prices, Ray White reported.
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