1. Melbourne may be problematic, but regional Victoria has good prospects: Terry Ryder
Hotspotting.com.au director Terry Ryder says that while the Melbourne market is imploding, there are “good prospects for investors beyond the capital city”. Ryder picks Bendigo and Ballarat as locations that more investors should consider, describing them as strong and dependable. His other picks are in the west of the state, Warrnambool and Mildura, which offer similar qualities to the two former gold-rush towns and have “diverse economies, plenty of infrastructure spending and affordable real estate”.
2. Continue to be cautious about investing in prestige property: Louis Christopher
In SQM Research’s 2012-13 Boom and Bust report, managing director Louis Christopher urged caution about investing at the prestige end of the market, “where rental vacancy rates are higher, and transaction and holding costs are far higher”. Christopher says that from a purely investment perspective, it makes far more sense to acquire and hold three properties at $500,000 each, instead of one property at $1.5 million.
3. Modest growth in all capital city markets, with Perth and Sydney to outperform: Richard Wakelin
Richard Wakelin, director of Wakelin Property Advisory, anticipates price growth across all the major mainland capital city markets in 2013, with Sydney and Perth the best placed. He expects Sydney property prices to rise by between 4% and 5% in 2013, with its low vacancy rate and high rental costs “a signal for renters and investors to buy property”. Wakelin says Perth prices could rise 5% to 6% in 2013 despite much of WA’s booming resource-driven economy bypassing Perth. “Nevertheless, extreme tightness in the rental market appears to be overflowing into greater demand from first-home buyers. If this continues, Perth may see reasonably strong growth in 2013,” he says.
4. Expect more competition for properties at the lower end of rental market: Margaret Lomas
Margaret Lomas expects there to be increasing competition among investors for properties at the lower end of the market that are popular with renters. “You are going to have more competition for those types of properties … in the early and mid-part of 2013,” she tells Realestatetalk.com.au.