Australian property hotspots

How to find Australia’s best property hotspots

Terry Ryder says the local economy infrastructure and distance from major cities are some of the biggest drivers of Australia’s property ‘hotspots’.

Terry Ryder is the founder of hotspotting.com.au and is recognised as one of Australia’s top independent real estate analysts. He aims to inform investors and property buyers on the best places to buy property based on in-depth, forward looking research.

Terry firmly believes that the right property investments are instrumental to creating your future lifestyle and building your wealth.

It can be tough deciding where to invest, and that’s where Terry’s expertise on hotspots comes in. Terry Ryder defines a hotspot as a ‘place that’s going to outperform the general market’.

He told KnowHow founder Bushy Martin on the Get Invested podcast to avoid media commentary, which tends to steer the focus away from the true influences of performance in a location.

“It very much arises out of the local economy. I think the media tends to think in terms of macro national economic events, like the level of interest rates,” Terry said.

“In terms of the best places to buy, it’s really got very little to do with interest rates … it’s about what’s happening in your local economy. And that’s what we have across Australia, at any point in time – we have markets that are booming, markets that are rising moderately, markets that are stagnating instead of falling a little and markets that are absolutely plummeting.”

Terry said a huge influence on the strength of a local economy is the infrastructure, including existing infrastructure and spending on new infrastructure.

He says infrastructure can be a huge generator of economic activity and jobs, which then increases the demand for real estate.

“I think that explains the difference between say Sydney and Melbourne, which have had a substantial boom that Brisbane, Adelaide and Canberra haven’t had,” he said.

“Melbourne and Sydney have been spending massively on infrastructure that’s generated so much for their economies, and that’s had an impact on the residential property market.

“Probably the one that has the greatest influence is transport infrastructure like new or upgraded motorway links and new rail links. Those are things that can really revolutionise the appeal of a location that might have been previously not accessible.”

With infrastructure, there are three phases of growth – when it’s first announced, the construction and when it’s finished.

So, when evaluating a location, Terry told potential buyers to wait for the second phase of growth before committing.

“The optimum, most sensible time to buy is when they actually start building it … you can be pretty confident it’s going to be there because they’ve actually started building and committing resources to it,” he said.

In light of COVID-19, Terry also said prime locations to consider are those outside major cities and metropolitan areas. With more and more people working from home, it has allowed for great opportunities in more remote areas.

“The biggest single thing is that the shutdown forced people to work from home. And a certain portion of those people are going to be seeking to make that a permanent arrangement because they realise that ‘hey, this actually works, I can work effectively from home. And that means I don’t necessarily have to be living in the big city to be close to the big CBD where the office space is’,” Terry said.

“And it kind of can work at both ends because the company that employs people is having more people working effectively from home. They don’t have to spend so much on very expensive office space.

“I think this was a trend that was already underway – people moving to the fringes of the big cities or out beyond the fringes – because of technology and improving transport links. So COVID-19 exacerbated that trend by making more people aware of the possibilities of working remotely telecommuting.

“We already are seeing an uplift in interest in those places, those good, strong regional centres that have a life of their own. But they have the benefit of being within striking distance of the big city.”

Beyond the appeal of promising future growth, Terry also discussed the importance of locations and properties with value-adding potential.

“I think property investors, and certainly I am, are looking for ways to accelerate the process of buying property that’s not only a great location for future growth, but has a value-adding opportunity – the ability to practise, to build a granny flat, to subdivide, to build a second dwelling or maybe a renovation possibility,” he said.

So, which are some of the best regional centres across Australia to consider? Terry revealed that investors and home buyers should be looking at locations such as the Sunshine Coast, Brisbane, Albury-Wodonga, Bendigo, Ballarat, Orange, Queanbeyan, Adelaide and Perth.

The common characteristics of these towns and cities which set them up for great future opportunities are their main job sectors and services, high employment rates, large infrastructure spending and well set up economies to withstand the negative impacts of COVID-19.

Listen to the full interview here.

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