This article was originally published by Su-Lin Tan on the 15th Dec 2016 via afr.com.au | Image: Tabcorp’s online website Luxbet is taking bets on home price growth.Chris Hopkins
Australia’s obsession with the real estate gamble just went up a whole new level – betting on which city gets the highest house price growth.
Tabcorp’s online website Luxbet is taking bets on which capital city will take the gong for the biggest capital appreciation for 2017.
Top of the list is Melbourne, paying $3, then Hobart at $3.50, Sydney $4.25, Adelaide $4.75 and Brisbane $4.75.
“Despite the possibility of an oversupply of apartments in the CBD area, our analysts are predicting another year of growth in Melbourne property prices with a $1.85 line on the median price at the end of 2017 of $785,000,” Luxbet’s Dylan Atkinson said.
Luxbet analysts may not be far off the mark.
For the three months until November, Melbourne’s led the race with the highest monthly price growth among capital cities.
On Thursday, Corelogic index shows Melbourne catching up to Sydney with the year on year price increase at 12.43 per cent. Sydney prices have risen 13.56 per cent year on year.
Melbourne also consistently outpaces Sydney with the number of auctions on display, offering property punters lots of homes to choose from – a sign of a robust residential market.
Luxbet attributes Hobart’s second place ranking to a “boom” in the Tasmanian capital city.
“The line for Hobart’s median price for the end of 2017 is set at $345,000 with all signs pointing to a booming market in the Tasmanian capital next year,” Mr Atkinson said.
Hobart property prices didn’t fare too badly in Corelogic’s hedonic index last month either, rising 0.8 per cent.
In February, Hobart outshone Sydney and Melbourne with a sterling 2.9 per cent price rise.
Late last year, experts were already calling out Hobart as the next bright star in the Australian residential property market.
“We believe that Melbourne will be the out-performer of the year, followed by the Gold Coast and Hobart. Each of these respective cities are benefiting from the lower Australian dollar,” SQM Research managing director Louis Christopher said.
Economic improvements led by the Tasmanian government and a falling unemployment rate has driven demand in the rental market in Hobart, Mr Christopher added.
With the market swarming with wealthy babyboomers, Hobart is primed for more growth, Corelogic head of research Tim Lawless said.
“Investors looking for value should be looking for areas where the lifestyle buyers are going to such as Hobart and Byron Bay,” he said.
Add this to existing strong rental demand and undervalued properties, and Tasmania is an investors’ dream, Knight Frank Hobart’s Scott Newton also said.
Not surprisingly, Darwin and Perth are the big favourites to win in the price fall category.
Luxbet is paying $1.65 for Darwin to claim the biggest decrease in house prices in 2017, ahead of Perth, which pays $3.25. Canberra is in the distance at $6.
“Darwin is the clear favourite to experience the biggest percentage decrease next year with our traders believing that the trend in 2016 of an oversupply in the market due to job losses in the region will continue,” Mr Atkinson said.
The same goes for Perth as both cities continue to suffer from the mining downtown and soft economies.
Alternatively, Darwin is paying $51 for a price rise, and Melbourne is paying $17 for a price fall.