Smaller capital cities and regional centers are now the primary focus of property investors, as attention switches from Sydney and Melbourne to the likes of Perth, Canberra, Hobart and Adelaide. 

Lately, we have seen some movement in capital growth prospects, with new markets rising as the two biggest cities wind down, following their recent up-cycles.

The reality that Australia has many markets moving in different directions and at various speeds, is an advantage for property investors.

While some commentators discuss Australian real estate as a single market, there are actually many different markets driven by events in their local economies.

“Sydney and Melbourne have been rising, while Perth and Darwin have been falling, and others cities like Brisbane and Adelaide have been marking time, with only very minor growth.”

While only the outer-ring areas of Sydney and Melbourne are still firing, Hobart is performing strongly, Canberra is rising steadily and Perth is recovering.

Adelaide and Perth are also expecting better performance in the next 12-18 months.

In regional Australia, cities such as Newcastle, Geelong and the Sunshine Coast have strong local markets, while other regional centres like Ballarat and Townsville are starting notable growth phases.

National factors such as access to finance and the level of interest rates are common across the country, but the core factors that differentiate one market from another, are events in the local economy. These include population growth, business expansion and spending on infrastructure, which generate economic activity and jobs creation. Out of that comes local demand for real estate.

Perth is an example of the emerging opportunities nationwide as market scenarios change. It has been emerging from a period of decline, with growing evidence that a recovery phase is underway. Sales activity is rising, vacancy rates are falling and values are growing in the million-dollar suburbs.

Terry Ryder from Hotspotting.com sees “Perth as the city of opportunity for investors.” “Prices are down after a couple of downturn years and there is an absence of competition from other buyers ahead of the upturn.”

Ryder also tips Adelaide to show stronger price growth, as investors discover the value-for-money in one of our cheapest capital cities, underpinned by significant events evolving in the local economy.

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