Best place for long term growth

Assume 20 years from now as long term...which city/town would you consider the best for cagr.

 

Melbourne south west will get the highest growth long term, given its only around $350-450K range atm.
Melbourne in general is yet to reach the same median as Sydney (>$1m), so a lot of room for growth(both for property values & population).

 

Possible a 3 million dollar question for some areas......

 

So you are saying that total purchase price relates to growth?
Do you mean all properties will end up in the same proportional cost?
Eg. assume something out west which has an *value" of 300k and something east has a "value" of 900k, then over time are you saying that it will always be roughly the same proportion (1/3rd) ?
That also has not historically been shown to be true in general (eg 15km from major CBD vs rural town), but I don't know how it would fare when comparing things where both are within say 35km of a major CBD like Syd/Melb, where one is, say, 8km out and one is 35k out.

 

On a macro level, unless something dramatic happens, Sydney median will always be x% above Melbourne, y% above Brisbane & z% above Perth in the long term.

There will always be short term market movements ie Perth affected by another mining boom, fhb grant skewing a market, flood causing uncertainty but overall markets move at different times but will equalise and stabilise I've any given period.

If it's about timing entry and exit then a crystal ball or crystal Meth may be your answer.

At the micro level, a bit of government spending on infrastructure will boost some areas above others however unless you have reliable sources close to government you may not pick it as even some spending or withdrawal of spending comes out of the blue.

 

Current purchase price will give you an indication of room for growth.

Not proportional at all. Economics works on the principle of reaching equilibrium between supply and demand, Ceteris paribus.
However equilibrium is never achieved as Supply increases when there is more demand and demand increases when their is more supply (due to the price changes in both situations).

• Comparing - Melb and Syd - they both have similar populations and job opportunities
• Comparing - Melb south west 30Km and Melb east 30Km - both areas are within same state so bound by almost same laws and both areas are within same metro city so they benefit by same metropolitan activities.

 

Why has no one voted Wangaratta? Surely, it will have consistent boom ahead of it

 

Its a great question. I think the least likely places would be Adelaide, Gladstone, Karratha. (although I think Karratha is a great short term play)

Then perhaps Hobart, as it is coming off such a low base but would require some type of cultural/employment revolution amongst current generations to want to move away from big cties.

Wangaraata, could be a dark horse if a railway is ever built between the two big cities and or a big treechange effect comes about due to driverless cars etc as per Hobart

Perth as well is coming of a low base and a billion Idians and 250 million indonesians are still going to need resources above and beyond the needs of China.

40,000 people are moving to Brisbane every year currently and that growth is increasing.

Hmm melbourne and Sydney...yes currently great population growth and where its at at the moment..past performance is no indicator of future..yadda yadda...I wouldnt be optimistic in 10 years time for most growth but in 20 years time...hmm, could have another spurt or two.

 

If we just look at the most recently published population growth figures from ABS, wouldn't that provide a fairly good estimate of what the prices are going to do?

And as far as I remember, Perth has the largest projected population growth, followed by Melbourne.

 

@Realist35 But what are the job prospects?

 

including you

 

I'm no expert and happy to be corrected. If those population growth figures are to eventuate, regardless of the jobs, it will cause a massive disbalance between supply and demand and send house prices through the roof. Your thoughts?

 

From current prices probably Brisbane, because it'll squeeze in one more cycle ahead of Melb/Syd, all else equal.

In all honesty it's very hard to know though. If there were a gas boom Brisbane or Adelaide could fly.

 

Sydney 100%.
Will always be the number 1 city economically. Best beaches. Most importantly, it has demand that is ALWAYS going to outstrip supply. Melbourne has so much room for sprawl, where as Sydney is pretty much done. Melbourne have way too many apartments and it will take a good decade or two to absorb supply.

 

Demand cannot always outstrip supply. not in perpetuity. If that were the case, prices would increase at varying rates in perpetuity.

 

Hey I live in Sydney but I hardly think best beaches is the fundamental draw for most people when looking for a place to live.

as for too many apartments in Melbourne..currently 100,000 people a year are moving to Melbounre and 80,000/year to Sydney. By all accounts, melbourne will be the larger city ergo Number 1 economically within 20 years.

 

If we look at this article, http://www.econ.mq.edu.au/Econ_docs/research_papers2/2004_research_papers/Abelson_9_04.pdf

If the past 40 years is any indication of the future, I would say they will probably be about the same in terms of percentage. Otherwise Sydney would have ran away more significantly compare the other cities. even a 1% more over the last 40 years for Sydney would mean Sydney would be at least 1.5 Million median now compare to the other cities if you look at Peak vs Peak, but instead, It's the much of the same as 3 or 4 cycles ago in terms of the price ratio.

 

The biggest migrant group coming to Australia each year are by far from the UK, followed by New Zealand. Have you been to Bondi or the Northern Beaches recently? Fully of brits and kiwis, they aren't coming here for the public transport. Sydney offers an appealing lifestyle, and beaches close to the city are a fundamental element to this.
I realise that Melbourne's population will grow faster than Sydney but as i say, they have a huge supply of apartments and plenty of land out west to sprawl. There will not be a supply issue.

 

Well no, i mean its all relative. Demand pushes prices to a point that the demand wanes. And then punters look elsewhere for what they can afford and we all know how property cycles work. Long term is what we are talking about not a few months or years.

 

Hey I live in Balmain, its half Pom, with a fair amount of North Americans as well. Not so many Kiwis.