Sydney’s days at the top of the real estate game are over and Melbourne, which has taken over that mantle, is close to its peak. At the same time, many cities that have delivered little in the way of price growth to date are poised for better results. Some of Australia’s key regional centres are also doing well in 2016. In many ways, this is ‘the year of the small cities’

Queensland

Media reports a generalised median price growth figure for the entire city of Brisbane that indicates prices grew only three to four per cent in 2015, but individual market segments did considerably better.

Brisbane Northside saw many record double-digit annual growth in median prices after the area first took off nearly two years ago. Now the momentum has switched to the Southside. Logan City is being targeted for its affordability, infrastructure and jobs, while the Brisbane Southside precinct is also growing.

Ipswich City is recovering and looks set to deliver its best growth for several years, while the Gold Coast is rising strongly, with sales volumes increasing on the back of big infrastructure spending. We urge caution in the high-rise unit market, which has a terrible track record on capital growth.

It’s a different story with the housing markets. Many inland suburbs have strong momentum and prices are starting to grow. The Sunshine Coast is transitioning from a tourism economy to one with a broader base and this will drive real estate growth. Infrastructure and property developments underway or in planning total $15 billion, and this is driving economic activity and jobs growth. A similar process is happening in Cairns.

The Sunshine Coast is transitioning from a tourism economy to one with a broader base and this will drive real estate growth.

New South Wales

Sales activity in Sydney peaked towards the end of 2014 and gradually declined throughout 2015. This has been reflected in median price data since July 2015, with the annual rate of growth dropping to below 10 per cent.

Those still wanting to invest in Sydney should follow the infrastructure trail. The places to target are the Liverpool, Camden and Campbelltown areas in the south-west, and areas in the north-west such as the Rouse Hill precinct.

Regional NSW is on the rise, with Newcastle and Hunter Valley regions among the markets to watch. Port Macquarie has been rising steadily for the past two years, boosted by improvement in the tourism industry and spending on infrastructure. Other coastal markets that look to have prospects include Coff s Harbour, Forster-Tuncurry, Ballina and Tweed Heads.

There are numerous strong centres inland as well, including Dubbo, Orange, Bathurst, Goulburn, Queanbeyan, Wagga Wagga, Lismore and Tamworth.

Western Australia

The relative few who achieve great success with property investment are those who buy in good areas when the market is down — meaning there is little competition and they can negotiate a good price. Investors with that mindset will be considering Perth this year.

Perth and Darwin were the market leaders in 2012, well ahead of Sydney’s rise. Perth’s market peaked in early 2013 and has been winding down steadily since.

Median prices and median rents for both houses and apartments in Perth fell in 2015. This market is still falling and will touch bottom probably some time in 2016, which makes it a good time to consider an investment there.

Northern Territory

Darwin has by far the weakest market among the capital cities and it’s difficult to see what will turn it around in the next 12 months.

All the major research sources record substantial decreases in the median house price, the median unit price, the median house rent and the median unit rent. The vacancy rate is the highest among the capital cities.

Victoria

Melbourne remains quite buoyant and is having another good year in 2016, although this is likely to subside as 2016 progresses.

The latest figures show Melbourne has overtaken Sydney to be the number one city in terms of annual price growth rates, but it’s clear that the Top End of the market has lost its spark. The previously buoyant Middle Ring is moderating, with the most momentum now occurring in the Outer Ring suburbs.

Expect good growth in outer areas such as the Whittlesea LGA in the north, the Brimbank LGA in the west, and Wyndham City suburbs such as Point Cook, Werribee and Tarneit in the south-west.

Just outside Melbourne, Geelong is the strongest of the regional Victoria markets.

Perth and Darwin were the market leaders in 2012, well ahead of Sydney’s rise.

ACT

While Sydney has been raging, Canberra has been stuck in neutral, undermined by Federal Government downsizing of the public service, which has reduced demand and impacted confidence.

But there have been improvements in house sales levels over the past 12 months, despite the unit market remaining weak.

Tasmania

Hobart and Tasmania may be the surprise packet over the next 12 months.

There is an accumulation of positive economic indicators and government policies to generate growth and a slow but steady rise in property sales activity

Domain figures show a 7.6 per cent raise in Hobart’s median house price in the 12 months to 30 March, although other sources have different figures.

I’m expecting Tasmania to have a positive year, possibly the best in a decade, as investors realise markets are rising and that the value proposition is attractive. The median dwelling price in Hobart is $330,000.

Hobart and Tasmania may be the surprise packet over the next 12 months.

South Australia

The generalised single figure provided by sources such as Domain and CoreLogic suggests Adelaide’s house market delivered growth of only two or three per cent in 2015 – but numerous suburbs did much better than that.

Largs North (median house price $455,000) grew 14%, Semaphore Park ($470,000) was up 17% and Cheltenham ($540,000) recorded 21%. At the pricier end of the market, Glenelg East (695,000) managed 17%, Henley Beach East ($800,000) 14% and Royston Park ($855,000) 18%. These figures show that, while Adelaide is perceived to lack population and economic impetus, there is good growth to be found if you know where to look.

Adelaide is having a pretty solid year in 2016. There is certainly no boom, but there will be pockets such as the Salisbury, Playford and Okaparinga LGAs around the metropolitan area delivering strong price growth.