National Hotspots - 2nd Half 2017

The PRD capital hotspots report provides valuable insight and highlights for the market, reporting on a number of key indicators to create a holistic picture of the property conditions in each capital city.

Each report focuses on suburbs within a 20km radius of the CBD, taking into consideration the following factors:

•       Sales indicators - the number of sales transactions and median price growth between 2016 and 2017.

•       Rental and investment indicators - median rental price, rental yield, and vacancy rates.

•       Affordability - the average home loan of the relevant state, which indicates the amount that banks are comfortable with in approving for mortgage loans. We add a percentage premium to this amount to indicate the maximum property price considered to be affordable.

•       Projects value - developments scheduled to commence in the 2nd half of 2017, which include mixed-use, infrastructure, industrial, and residential projects. This is key to maintaining growth as it indicates a potential increase in economic and commercial activity; as well as interconnectivity to key transport routes, the CBD, and other major urban business hubs PRD capital city hotspots are available for Sydney, Melbourne, Brisbane, and Hobart.

Buyers would need a budget of $1M-$2M to access most of Sydney’s house market (51.6%), however approx. 37.5% of the market can be accessed by buyers with a budget of $500k-$800K in Melbourne and most buyers in Brisbane (52.9% of the market) only need a budget of $500k-$800K. This demonstrates the contrast of affordability the three capital city markets.

In light of affordability concerns, this potentially explains the current surge of Melbourne and Sydney investors into Brisbane and Hobart, by lower entry price (even at the high-end market) for a similar level of rental yield and capital growth.

For further information on each PRD Capital City 2nd half 2017 Hotspot Series, please contact research@prd.com.au

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