The 2019 McGrath Report has been released. In it, several trends to watch for 2019 are named, alongside John McGrath’s suburb picks.
In his opening letter, Mr McGrath backed up his thoughts that the expected market corrections would not be as dire as predicted in media reports, saying that the current five – 10 per cent drop will likely be met with another five per cent adjustment, before settling.
“I believe the worst of this correction is already over and we’re in for a much softer landing than many pundits predicted,” said Mr McGrath.
He went on to point out that the cooler conditions spelt better options for FHBs and that demand was still high, the market was just going to take time to adjust to implications from changing financial options.
In Sydney, Mr McGrath has focused on the inner west, naming Earlwood and Stanmore among his top picks. Putney was also given the green flag, benefitting from the proximity to Hunters Hill.
“Once dominated by mainly public housing residences, this charming waterside pocket is one of Sydney’s least known riverfront addresses. When it goes the way of its sought-after neighbour Hunters Hill, you’ll be regretting not owning a small piece of it,” said Mr McGrath.
Avalon Beach in Sydney’s north and Maroubra in the south rounded out the picks.
In Brisbane, Mr McGrath named the suburbs going under the radar. He selected Maroochydore on the Sunshine Coast, Annerley and Grange in Brisbane and Springfield Lakes as four suburbs on the rise. He also named Pimpama on the Gold Coast, saying the nearby boom in infrastructure would have a positive effect on house prices.
“Pimpama recorded Queensland’s fastest population growth at 31 per cent in FY17, with buyers enthusiastically buying or building brand new homes. Pimpama is affordable with a median house price of $475,000 and is located within the rapidly developing northern Gold Coast region along the M1 corridor.
“The $100 million Pimpama City Shopping Centre is opening in September 2018 and the $56 million Northern Gold Coast Sports and Community Precinct is slated to open in 2020. A brand new $470 million Westfield will open in nearby Coomera in late 2018 and there is a proposed new train station to better connect it to Surfers Paradise. The northern Gold Coast population is projected to double from 75,000 residents to 167,000 in 20 years, accounting for one-third of the city’s total growth,” said Mr McGrath.
Infrastructure growth also supported the suburbs to watch for Mr McGrath in Melbourne. He selected Thornbury with its close proximity to the popular Brunswick and Box Hill which boasts a rail hub and hospital.
Bonbeach was named a good spot for beach seekers on a budget, and Wantirna made the list as a suburb poised to enter the million dollar club. Lastly Mr McGrath named Cheltenham as a bustling hub where prices were likely to rise.
“Straddling Nepean Highway, house prices on Cheltenham’s west side are still well beneath those of its salubrious neighbours Sandringham, Mentone and Black Rock. Its second metro commuter rail option, the recently opened Southland Station, cements this suburb’s profile as a business and commuter hub.”
“A happy hunting ground for investors with impressive apartment median yields of around 6.4 per cent. Greenway’s waterside living is enhanced by mountain views. It is enjoying an influx of people buying affordable new townhouses and drawn by jobs at two government departments including the Department of Social Services national headquarters, which opened in September 2017.”
Alongside Greenway, Mr McGrath named Campbell and Mawson as suburbs to watch, with both experiencing new demand from younger demographics as a bigger assortment of housing options hit the market.
Harrison was also named for its changing image and popular with younger buyers, alongside Kaleen where older stock provides an affordable entry point into a popular region.
“This suburb provides a good entry point into the inner north, with original older style homes remaining affordable. Kaleen Plaza, with its major supermarket and speciality shops, is complemented by smaller local shops. Proximity to the city and good transport links are a major plus. Demand pushed house prices up 12.8 per cent in the year to June 2018 to a median $733,000.”
As well as Mr McGrath’s suburb recommendations, the report also highlighted some of the trends to watch into 2019.
The first of these was the tendency towards smaller homes, with Australians requiring less space due to a trend for minimalism and also higher numbers of people opting for dining out or meal delivery services over kitchen and dining space.
Shared spaces in modern developments are also allowing for smaller residences, with added function built into these areas which encourage activity outside of apartments or townhouses.
Regional movement was also picked as a trend, as Australia’s population grows and flexible working conditions or business hubs in regional areas make it easier for people to relocate. As capital cities continue to remain unachievable financially for some, it stands to reason that the move to regional hubs will continue, which will drive better infrastructure and business options outside of the traditional locations in cities.