Australia property investment outlook

Why Australia is still a hot property investment market

When it comes to experience and access to data, there are few property experts in Australia that can rival Nerida Conisbee.

As Chief Economist with the REA Group, Nerida has access to the search information of every person using realestate.com.au and realcommercial.com.au, as well as data sourced from many other businesses owned by the Group.

And while Nerida acknowledges the challenges facing the property sector in the wake of the Banking Royal Commission, she told Bushy Martin on the Get Invested podcast that she still sees Australia as an excellent market in which to invest.

“I think the safety of Australia is a key,” Nerida said.

“We do have stable governments, low sovereign risk. We’re a growing economy – not growing fast at the moment – but, it’s still a growth economy.

“Equally, we have to look at other Asian markets. Hong Kong was seen as a very strong growth, very safe market, but with political instability there, it’s looking pretty rough. You know, you could invest in Thailand, Malaysia, but there are issues around sovereignty (and) stability in those countries.

“So I think in terms of safety, I mean, you really, really cannot go past Australia.” 

Nerida gained her experience across roles in consulting, and heading up research at Jones Lang LaSalle and Colliers, before taking on her role at REA.

As Chief Economist, she regularly shares her insights in the media as a spokesperson for REA, and believes that the value she can bring to her role is strongly based in the quality of the data available to her.

“I provide a lot of discussion around the data we see with the historical pricing data, but also a lot of the data that we’re seeing around search,” Nerida said.

“We just have so much information … and it’s the data I get that goes towards informing my view. I don’t really see the data in itself being the story … People often think the data is the data. But, you know, the reality is there’s good quality data and there’s bad quality data. Once you start doing modelling, once you start doing forecasting, there’s a lot that can change … models are highly malleable.

“I think people in the general public don’t realise that a forecasting model can be put out quite easily, and the more complicated you make that forecasting model, the more changeable it can be made by just taking a few assumptions.”

It was the data available to Nerida that lead her to be sceptical when many other commentators were predicting a huge downturn in property prices.

“The most recent downturn was an interesting time for us because there was a lot of scaremongering. We had commentators on 60 Minutes saying prices are going to fall 45 per cent.

“We weren’t seeing the same sorts of falls … we just don’t see such big swings at a capital city level, as some other people say.”

She also points out that the recent downturn was driven by government and the Royal Commission, not a struggling economy, and believes the difficulties around lending will ease.

Nerida said there are currently a number of Australians regions that are good property investment prospects.

“From a search perspective and an imbalance between search and listings, Sydney is really leading the charge at the moment, (which is) flowing through to pricing. We can say again, Northern Beaches is one of the top areas in Australia.

“Central Coast is a market that we continue to see a lot of activity. I think it was an affordability driver that younger people are moving up there to get access to a nice lifestyle.

“(In Queensland) I think the best price growth will be Gold Coast … (and) in Adelaide we have a very strong buyer search in the inner suburbs of Adelaide (as well as) a lot of interstate search looking at beachside.”

Listen to the full interview here.

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