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Do Hot Spots Exist?


Where is the current hot spots for next year? Is always a hot topics. Do hot spots exist?  It’s a great opportunity? A lot of people see it as an opportunity to get in it and make some money quickly.  I have followed some people who predict hot spots, and one of the things that I’ve noticed is that they make these predictions, but they very rarely want to be held accountable for them. As some of them do under perform.  For example: look at Moranbah and places like that where there were big gains to be made there, but there were some massive losses.

I like a more stable market rather than a quick short-term hot spot.  I do believe momentum of our markets is going to still drive us. Remember, Sydney (see my article on Sydney market) and Melbourne has had such strong markets that we get that wealth effect. Many of us are feeling wealthier as the value of our homes goes up and we’re going to want to invest again, while others are feeling they’ve missed out, so they’re going to buy into property too.   

images-4A combination of 3 factors: 1. Momentum, 2. Interest Rates 3.Reasonably strong population growth & economy (better than the western countries). suggests to me that inner and middle ring suburbs – in particular, in Sydney, Melbourne, and Brisbane – are going to do well. But I think our capital cities in the other areas are going to languish a bit. Perth is catching its breath. It had too good a run for a while. And the other capitals just don’t seem to have the economic strength to attract strong population growth that drives our property markets.

Michael Yardney from Metropole Property strategists quoted this year (which wraps up the market for next year!)

“I think we’re going to have the impact of wildly volatile Australian dollar. There’s still going to be overseas problems next year. There’s going to still be a flood of foreign investors coming in. Super-funds are going to keep investing. And we are going to have another year of low, and I believe, reasonably stable interest rates. And on the back of that, there will be stronger job growth, and therefore increasing consumer confidence. 

Now they’re all easy to look at in the rear-vision mirror. What’s going to be ahead I think is much more difficult, maybe impossible, to judge. But I can see positive factors for 2015.”  

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