Property Observer, Jennifer Duke, 8 October 2014
There are eight regional cities expecting capital growth above double digits over the next three years, according to the Australian Housing Outlook 2014-2017 prepared by BIS Shrapnel for QBE.
The cities are located in New South Wales, Victoria and Brisbane.
Here are the markets QBE is tipping to grow:
NEW SOUTH WALES
Newcastle: Total price growth of 15% forecast for 2014/2015 and 2015/2016, accelerating in the latter year as affordability in Sydney becomes more challenging and outward migration picks up. Minimal increases expected in 2016/2017, resulting in total growth of 17% over the three year horizon.
Illawarra: The local rental market is tight, with vacancy rates low. Price growth is expected to be 7% per annum over 2014/2015 and 2015/2016, with rises around 1% in 2016/2017, to a total of 16% over the three years.
Ballarat: With growth below that of Geelong and Bendigo over 2013/2014, population growth has remained strong and vacancies tight. Prices are expected to rise by a total of 11% in the three years to 2016/2017.
Bendigo: A strong economic environment and the new $600 million Bendigo hospital is underpinning employment. As a result, 6% growth is forecast over 2014/2-15, although a progressive slowing will then occur. As of June 2017, the three year growth is expected to total 10%.
Gold Coast: A total 15% growth is forecast for the three years to 2016/2017. This is on the back of prices down 16% from peak in real terms as of June 2013. A pick up in the construction sector, and infrastructure will help underpin growth.
Sunshine Coast: A total 14% increase is expected over the three year period on the back of the Sunshine Coast University Hospital, and strong intrastate and interstate migration.
Townsville: Vacancy rates increased over the past 12 months, with the median price dropping by 1% due to the impact of fiscal consolidation on jobs. However, conditions are expected to improve to a total 10% growth over the three years.
Cairns: Showing signs of a recovery, vacancy rates have tightened with a lack of supply coming onto the market. The median house price has already seen a 10% gain, and can expect a further 14% over the next three years as the tourism sector strengthens.
Disclaimer: This editorial provides general information only.