Property prices are on the rise in 2010, so where will you get the best bang for your buck?

According to Matthew Bell, economist at Australian Property Monitors (APM), Brisbane and Perth are the best places to buy.

“Queensland and Western Australia’s increased exposure to the downturns in both the resources and tourism sectors has meant that price recovery for both houses and units have trailed other states,” says Bell. “However it’s important to move now as prices are likely to recover in early 2010.”

But he also says there are opportunities for bargains in Sydney and Melbourne where some suburbs still remain under their late-2007 levels, even after the strong growth of the last six months.

Queensland

In Queensland, Bell says the best suburbs to buy are Hawthorne and Lota for houses and Kangaroo Point for units.

Meighan Hetherington, managing director of buyer’s agents and advisers Property Pursuit in Brisbane, points to suburbs that will benefit from infrastructure developments including the northern busway, the airport link and the Clem 7 tunnel.

“Lutwyche, Kedron, Gordon Park, Alderley, Enoggera, Greenslopes and Woolloongabba will all be good suburbs,” says Hetherington. For owner occupiers she sees premium suburbs such as Paddington, Auchenflower and Bulimba all showing potential.

Dan Molloy, managing director of the Real Estate Institute of Queensland, says steady demand from both owner occupiers and investors together with population growth will put pressure on supply in the north-eastern State.

“Regional Queensland has started to return to form with agents reporting steady demand and price growth,” says Molloy. “Rockhampton and Toowoomba were two of the top Queensland performers of 2009, due partly to their proximity to major resource or energy precincts and affordable prices. Being a resource community – together with Gladstone and Mackay – augurs well for the future of these regions.”

Victoria

Bell’s Victorian hot spots include Mentone for houses and Toorak for units.

Population growth will be the key driver in Melbourne. The Real Estate Institute of Victoria’s policy, communication and research manager Robert Larocca says growth in the population of the Victorian capital has more than doubled in the last five years from 55,000 new residents a year to 113,000. Little wonder that Melbourne property prices jumped some 20 per cent in 2009 to crack the $500,000 median price for the very first time in the fourth quarter.

The Real Estate Institute of Victoria has given mostly inner city and bayside suburbs a five star rating which means these areas could see growth of 8 per cent or more in the next three to five years. Such suburbs include Carlton, Caulfield, Moonee Ponds, Sandringham and St Kilda.

New South Wales

Sydney suburbs offering opportunity according to APM’s Bell include Mona Vale for houses and Woolloomooloo for units.

Tim McKibbin, CEO of the Real Estate Institute of NSW says that any area within a 5-10 km radius of the CBD offers potential as there is a shortage of rental properties in these areas.

RP Data says suburbs that are likely to record capital growth are those where population growth is strong, housing supply is constrained, transport infrastructure provides efficient commuting options and social and retail infrastructure is conveniently based.

A recent report by RPA Data cites such suburbs as being Granville, Rockdale, Lidcombe, Riverwood and Waterloo.

Western Australia

Bell’s top picks in Western Australia include Halls Head and Nollamara for houses and Mandurah for units.

RP Data meanwhile sees promise in Bassendean on the shores of the Swan River, Thornlie, 15km south-east of the CBD, Kenwick, Cannington and Kewdale.

South Australia

Thebarton, directly North-West of the Adelaide CBD represents a very appealing purchase price according to RP Data, given its proximity to the city. Further out, Glanville is more affordable than most of its surrounding suburbs.

Other strong contenders in SA are Brompton, Torrensville and Parkside.

Tasmania

In Tasmania, Martin Harris CEO of the Real Estate Institute of Tasmania expects the housing market to continue to grow in the island state over the next few years.

“Growth in Tasmania continues to focus on some suburban areas of Launceston and Hobart,” says Harris.

In Hobart he singles out Kingborough, 15 minutes south of the CBD, along with Lindisfarne, Mornington, Warrane, New Town, Moonah and Glenorchy. In Launceston he highlights Newstead, Invermay and West Launceston.

Outlook

The general consensus is that now is the time to buy.

“We are at the start of an upswing in the cycle,” says Meighan Hetherington, managing director of buyer’s agents and advisers Property Pursuit in Brisbane. “This is a fantastic time to be buying property.”

Whether you are an owner occupier or an investor there are benefits in buying now.

APM’s Bell while house prices in some areas have already exceeded by nearly 3 per cent the levels prevailing before the global financial crisis, that growth is expected to continue well into the current year.

Angie Zigomanis, researcher with BIS Shrapnel says that he expects property prices to rise in the mid-to-high single figure digits in 2010.

He adds that even though the first home owners grant has gone back to $7000, there was still plenty of demand in this market for three key reasons.

“Firstly there is the demographic spike of 25 to 35 year old who are generally first home buyers,” says Zigomanis. “Then you have interest rates that are still pretty low and if you compare buying with renting, buying is more attractive.”

The rent/buy argument is certainly bolstered when you look at the median rent. APM says median house rentals were $460 a week in Sydney in the December quarter of 2009 although in Melbourne they are a little lower at $360 a week.

When buying Property Pursuit suggests you also look at such factors as rentability, potential and affordability.

For instance, Hetherington says you should always stay within the second and third quartile of prices in the suburb in terms of price and rent and make sure that the surrounding properties cannot become high density blocks of units.

The old adage is that if you should always buy well when it comes to property.

“When looking for property bargains it pays to do your homework to make sure you are choosing an area and a property t hat is likely to see your investment grow,” says Bell.

So he suggests you do thorough research of a property and its area looking at recent and historical sales data, auction clearance rates, rental yields, price differentials and trends. One good website to glean this information can be found at www.homepriceguide.com.au

Also, seek advice from your local real estate agents who have expert knowledge and experience in the suburb.

SOURCE: aussie.com.au

Property Investment News – Australia