Five capital cities and a number of major regional locations are on track for solid property price growth in 2019 – as long as banks return to more reasonable lending standards, according to a forecast by property market research firm Propertyology. 

Propertyology Head of Research Simon Pressley says a combination of market and economic factors meant some locations could experience double-digit price growth this year.

Capital cities tipped for growth - at a glance

• Hobart tipped to be strongest performing capital city
• Perth could be strongest in two-three years'
• Regional Queensland and Western Australia will perform well

"That number will increase if banks stop playing God with solid borrower’s financial futures," he said. 

“Hobart is again a no-brainer as the capital city expected to perform the strongest in 2019,” Mr Pressley added.

“The Tasmanian economy is a remarkable success story that has now spread right across the state. Launceston has the potential to be Australia’s property premiers in 2019 while Burnie and Devonport also will perform strongly. 

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“Don’t be fooled by the 2018 price fall of two per cent in Perth because a large proportion of its former oversupply has been absorbed, vacancy rates have reduced from 6.9 per cent to 3.3 per cent over the last two years, and expectations for new job creation is now high.” 

Mr Pressley told WILLIAMS MEDIA that Perth could well be Australia’s best-performing capital city in two to three years’ time. 

"As long as sensible credit policy is restored, price growth of up to five or six per cent was forecast in Adelaide, Canberra and Brisbane, which was likely just the start of the growth cycles in those cities, he said. 

“I couldn’t rule out somewhere close to double-digit annual price growth in Brisbane and Adelaide over the next two to three years and conditions in Canberra still look solid – although steer clear of apartments,” he said. 

Mr Pressley says credit conditions had a 5 to 7 per cent drag on property prices last year, and that it's in the national interest for banks and APRA to "bury the hatchet sooner rather than later".

“The best opportunities for the foreseeable future are in locations outside of capital cities where housing is more affordable, annual cash flows are stronger, housing supply is tight, and economic conditions are good,” he said. 

“As we’ve already seen during the last couple of years, double-digit price growth will occur again in 2019 and beyond in many regional locations.” 

Regional locations tipped for growth

Mr Pressley says the resources states of Western Australia and Queensland will produce the best-performed property markets for the foreseeable future. 

“Cairns and the Sunshine Coast have the best fundamentals in Queensland for 2019 but expect a big improvement over the next few years from Mackay, Rockhampton, Townsville and Toowoomba.” 

In Western Australia, the regional locations of Albany, Busselton, and Margaret River may outperform Perth.

Areas in New South Wales tipped to grow include Wagga Wagga, Armidale, Tamworth, Bathurst, Muswellbrook and Parkes. 

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“Victoria’s regions are also thriving,” Mr Pressley said.

“Shepparton, Warrnambool, Ballarat, Bairnsdale and Bendigo all look promising.” 

Mr Pressley said the forecast defies the current “consensus” view that markets are in the doldrums when that point of view was shaped by the performance of markets in just two cities. 

“The consensus view is also based on the here-and-now and with an apparent lack of understanding of how underlying fundamentals might shape things just over the horizon,” he said. 

“History is littered with masses of people following the consensus when making important property decisions only to subsequently realise that things looked a lot different a year or two later.” 

Ingredients for a boom

Mr Pressley says there are obvious signs of potential booms in many locations - as long as you're prepared to look past Sydney and Melbourne. 

He adds that many of the markets tipped to grow in value this year had a number of fundamentals that supported the forecast, including jobs growth, early signs of increasing wages, tight housing supply and falling rental vacancy rates. 

“On a national level, our economy is looking better than it has for years with unemployment at 5.1 per cent, the Federal Budget set to be in surplus for the first time in a decade, the economy growing, and our population set to increase by more than 350,000 again year,” he said. 

“Interest rates aren’t expected to rise until 2020 at the earliest, plus the international student, tourism and mining sectors are all strengthening and creating even more jobs. 

“There is a long list of big-picture, positive stuff, which collectively paints a very bright future. 

“Believe the doom and gloom reporting if you wish, but I’m telling you that there will be locations that experience a property boom over the next few years.”

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