In the report, which is an annual assessment of the property market focusing on the Australian east coast but also featuring market analysis on regional cities, Mr McGrath expresses confidence in the property markets of smaller cities and regional areas and dismisses any talk of a bubble.
“Sydney and Melbourne have become the ‘New York’s of Australia’. However, the value gap
between these two centres and the rest of the country is too wide in my view. While I believe the gap is likely to close somewhat over the next few years, it will not be because of a major correction of values in Sydney and Melbourne,” Mr McGrath says in the report.
“Rather, it will happen as other cities play catch up. But while I’m certain that the Sydney and Melbourne markets will take a breather, I’m equally certain there is no bubble about to burst.”
To address affordability, Mr McGrath says there is a need to increase supply; create better infrastructure to facilitate access to work hubs; reduce tax burdens, especially stamp duty; and reduce delays in the local government approval process.
“If my beliefs hold true, those waiting for property prices in the big cities to come back within their budgets may be chasing a rainbow. Both first home buyers and Governments need to take responsibility if a solution is to be found.”
John McGrath picks his top suburbs to watch in Sydney, Melbourne, Brisbane and Canberra.
Sydney Suburb Picks
Over a century after her formation, this grand old dame still represents one of the best lifestyles in the country. With the new WestConnex roadway removing much of the street traffic, this great suburb is about to become even more popular. If you move in though you’ll likely never move out, so be warned!
Sometimes it’s easy to overlook the obvious like this hot suburb. Walk to Crows Nest, Neutral Bay and Mosman villages. Even the CBD if you like. Heritage homes and modern apartment living. What more could the savvy buyer or investor want out of one postcode?
Don’t tell me you haven’t discovered this little harbourside gem yet? Hidden in the heart of the historical inner west on the edge of the Parramatta River, this newly developed village offers an exquisite selection of residences to suite everyone’s taste. All this and only a few moments from the vibrant Majors Bay Road retail and restaurant strip, there really is no reason not to head there today to check it out.
With dynamic young professionals and successful empty nesters seeking to stay within ‘God’s country’, you’ll find capital values for this sought after address will continue to spiral up as far as you can see. And deservedly so. There isn’t a better lifestyle in Greater Sydney, as all the locals will tell you as they emerge from their morning dip.
Forestville remains one of my favourite picks for both lifestyle and value. Who said living near the CBD and beaches was out of reach? Forestville and surrounds has it all with a less hefty price tag than many of its neighbouring suburbs. But secure one here soon because Sydney’s best kept secret is fast getting out.
Melbourne Suburb Picks
Put this mid-ring sleeper with its parklands and rolling terrain on your watch list. Savvy investors are holding onto townhouses and detached dwellings for an inevitable price uplift flowing from Coburg, where comparable homes cost more. Its train station with services to Southern Cross is a boon.
Tucked beside Footscray, West Footscray benefits from its easy access to public transport, a buzzing cosmopolitan food scene and Victoria University campus. Only 7km from the city and still in the early stages of gentrification, housing prices are a steal compared to similar properties in the east.
Bayside Mentone is more affordable than its neighbour Beaumaris, despite its plethora of desirable private and public schools including Mentone Girls’ Secondary College and Mentone Grammar. Its beachside position, train station and period homes on large blocks will underpin its long term value.
Benefitting from its proximity to Doncaster’s many shopping, commercial and academic amenities, Doncaster East is quieter with a more leafy established charm and about 5% cheaper. Only 22km to the CBD via the Eastern Freeway, professional families are vying for its spoils.
This bayside beauty still has a six figure median house price but probably not for long. Hugging a strip of sandy beach overlooking Port Phillip Bay with a shopping village and metro train station. Stock remains scarce with just 88 of its 2,255 properties exchanging in FY17. This means prices can only go up.
Brisbane & Surrounds Suburb Picks
The bayside Brisbane suburb of Wynnum offers an enviable lifestyle just 14km from the CBD. It borders the more prestigious Manly and boasts the same seaside village atmosphere without the hefty price tag, which is attracting younger professionals as well as interstate and international buyers.
Located about 25km north of Brisbane in the Moreton Bay region, North Lakes continues to go from strength to strength with significant residential and commercial development continuing, including the $250M Laguna mixed use development. In the decade to 2016, North Lakes-Mango Hill had the largest population increase in QLD.
The Gold Coast suburb of Coomera was the fourth fastest growing area in Queensland in the 10 years to 2016, according to the ABS. Coomera will benefit from new infrastructure, including the $470M Westfield Shopping Centre which is expected to open in late 2018.
Peregian Springs, a master planned community located between Mooloolaba and Noosa on the Sunshine Coast continues to attract significant residential development, with the latest being its Ridges project. The suburb was also the second fastest growing area in QLD over the 10 years to 2016, with a population increase of 360%.
The creation of the Caloundra South Priority Development Area (PDA) has reignited this suburb of the Sunshine Coast. It will become a community of 20,000 dwellings housing approximately 50,000 people, according to the Queensland Government. The first residents have moved into master-planned community Aura at Caloundra South with houses also being built at the Harmony community in the suburb of Palmview.
Canberra Suburb Picks
Undervalued compared with neighbouring suburbs. Historic issues around social housing may be a contributor to its price lag however recent sales evidence suggests a catch-up has already begun in this northern suburb.
First home buyers love the newness of Ngunnawal and its schools, shops and amenities. Ngunnawal provides a diverse range of housing options from affordable entry level town homes to large family residences. It is close to a station on the new light rail network that begins operations in 2018.
With its close proximity to shops and amenities, this family suburb is underpriced and attracting value buyers. Unrenovated three bedroom houses on blocks between 600m2 – 900m2 are very popular.
Phillip is characterised by apartments and proximity to Westfield Woden. It represents great buying opportunities and will be serviced by the next stage of the light rail development.
An established suburb with real local charm, Macquarie is undergoing a rejuvenation with young families taking advantage of its larger blocks and access to arterial roads, quality schools and major Federal Government employment hubs. It offers an abundance of amenities with both the Jamison Centre and Belconnen Town Centre close by.