The past few years have seen the investor presence in real estate markets across Australia significantly increase. More and more Australians are turning to property as their preferred asset class and taking advantage of the current low interest rate environment to invest in the relative security of bricks and mortar.

Even buyers who may be faced with competitive markets are finding ways to invest in property through strategies such as ‘rentvestment’, where they rent where they want to live and buy in another area that may have more attainable property price tags attached. 

A question I am often asked concerns the best places to invest as people eagerly seek to discover the hotspots for their next property purchase.

The nature of the real estate cycle means that markets are consistently changing and it is difficult to predict movements with certainty. Prudent property investors will be researching, looking at data, engaging with professionals and putting all of this together to make the most informed decision possible for their personal circumstances.

Here are a few of my thoughts on locations in Australia that may hold good prospects for property purchases moving forward.

Melbourne

According to CoreLogic, Melbourne experienced a 1.5% lift in prices over the month of February, and a 13.1% increase for year-on-year.  

The state of Victoria as a whole is a strong market, however Melbourne in particular holds good prospects over the long term as a place for investment due to the strength of the economy and the prices of properties compared to similar property brackets in its northern neighbour, NSW.

Apartments are steadily coming on to the market, but at a slightly greater rate than demand. Unit approvals have risen 32.2% compared to a year ago according to ABS data from January 2017, so investors should remain wary of unit purchases that don’t meet their strict investment rules.

I believe that Melbourne remains a place where property exists in a good price range for such an iconic city, which may mean it endures as an attractive and relatively safe investment destination when taking a long-term view. 

Rouse Hill and Surrounding Areas

Rouse Hill sits around 42 kilometres north-west of Sydney and has quickly emerged as an area with good prospects for property investment.

CoreLogic data shows the median sale price of houses has increased 53.6% over the past five year, equating to a compound annual growth rate of around 9%.

Infrastructure is often a valuable indication of a suburb with good investment prospects as accessibility is enhanced. With construction of the Sydney Metro North West rail project well underway, we have seen many new developments of both houses and apartments emerging in the area.

Homes selling with million dollar price tags have become more frequent as people are attracted by qualities such as the family-friendly lifestyle found in Rouse Hill and surrounding areas, as well its location that is in relatively close proximity to the city.

With such a rapid growth in prices of late many might be wondering whether they have missed the boat on Rouse Hill and surrounding areas. I believe there are still suburbs around Rouse Hill that hold value for investors and it is hard not to believe that Rouse Hill itself won’t continue to enjoy growth over the long term as the train line begins operation and this micro economy, fuelled by the North West commercial district, comes into its own. 

Sunshine Coast

Stretching from Caloundra up to Noosa Heads, the Sunshine Coast region has been on the radars of many Australians.  The area offers a great coastal lifestyle, which makes it an attractive destination that can satisfy the needs of those looking for a new home, rental property or holiday home.

According to CoreLogic’s regional report for the September 2016 quarter, the Sunshine Coast was one of the top performers in Queensland, along with the Gold Coast, and experienced lifts in both house and unit values.

Median values across Queensland’s Sunshine Coast rose by 4.1% for houses and 3.0% for units over the year ending September 2016.

The region may hold good opportunities for investors as properties are still relatively cheap compared to other markets, the region is fairly iconic for both Australians and international visitors, and the area’s relatively close proximity to Brisbane should see it be a desirable location for Queenslanders for many years to come.

However, if the market encounters an influx of interest, there runs the risk that it can result in an oversupply of rental stock. Investors should remain cautious of this and ensure they are borrowing within a predetermined budget to avoid any financial shock should they encounter difficulty in attracting and keeping a good tenant.

Perth

The Western Australian market has been struggling for a while now as it encountered the effects of a downturn in mining activity. This has been particularly prominent in comparison to other state markets that have been experiencing continuously strong growth.

CoreLogic data showed that Perth home values have fallen by -0.9% over the three months to February 2017. While prices are still experiencing downward movement in many areas, this trend may begin to attract the interest of investors looking for value laden purchases.

Investors may be able to secure property at a fair price, and should be watching areas in and around Perth as its potential to stabilise is good and any large increase in mining activity can see that property market explode very quickly.