Nation’s most consistent market is Charlestown, New South Wales

Property investors tend to be drawn to boom markets, seeking rapid growth.

It’s understandable, but not always smart. Sometimes the outcomes are not what buyers expect.

Sometimes, also, buyers are not suited to the kinds of markets that attract them. Those with risk profiles that lean towards steadiness and safety should not be in resources-related regional centres or glamour high-rise markets like Surfers Paradise.

They should be in markets likely to deliver solidity – the consistency markets.

The best analogy I can provide is this, taken from one of my reports for investors:

The most-watched athletics events at any Olympics are the sprints. They’re excitement-plus, particularly when they feature athletes with star quality like “world’s fastest man” Usain Bolt.

The long-distance contests have their followers but are boring by comparison. Only diehard watchers sit through the two hours-plus of the marathon – people who admire grit and stamina more than flashy skills. You should have a similar attitude to real estate.

Many investors and developers go for the sprinters of real estate. The mining towns and the places with star quality like the Gold Coast attract many of property’s spectators and speculators.

But, in real estate, there’s a lot to be said for being boring. Many of the best performers are the unglamorous contestants. While the sprinters of real estate pull up lame or go down with cramp, the long-distance runners just keep on chugging along.

This speaks to the importance of seeking locations that offer consistency.

Of the various periodic reports I work on, my favourite is the Price Predictor Index which looks for patterns in markets to provide about the likely future movement in prices. We highlight the growth markets and also the ones we classify as danger markets, the ones where prices are likely to fall. 

But equally important are the consistency markets. These are the suburbs and towns that deliver consistent sales levels, quarter after quarter, year after year. They’re solid markets which represent safety for property consumers. They’re unlikely to deliver boom-bust scenarios.

Consistency markets also tend to have good price growth. The Autumn edition of The Price Predictor Index gave the award for the nation’s most consistent market to the suburb of Charlestown in the Lake Macquarie LGA which sits beside Newcastle. It has sold between 73 and 88 homes per quarter over the past three years. The median house price rose 10.4 percent in the past 12 months to $530,000.

Which brings me to one of the unsung markets of capital city Australia, Adelaide. One the hallmarks of the Adelaide residential market is consistency.

While the generalised price growth numbers have been fairly moderate, Adelaide markets have had busy sales activity in recent years - and a standout feature is the number of locations with consistent sales activity.

The Tea Tree Gully LGA continues to stand out as precinct with lots of suburbs marked by consistent sales performance.

They include Greenwith (median price $440,000), which won our vote as the nation’s most consistent suburban market in a previous edition of The Price Predictor Index. Quarterly sales in Greenwith over the past four years have been 51, 58, 56, 42, 53, 45, 43, 43, 44, 45, 49, 46, 51, 47 and 41.

And, as another indicator that this kind of consistency produces solid price growth, the median price for Greenwith has increased 8 percent in the past 12 months and 16 percent in the past three years.

The Onkaparinga LGA in the far south of the Adelaide metropolitan area is a frequent entry in our Hotspots reports, with its mix of coastal suburbs, new growth areas and wine country, boosted by improved road and rail links to central Adelaide.

Onkaparinga has many consistent performers, including Happy Valley and Morphett Vale (where quarterly sales have been 140, 142, 140, 124, 142, 137 and 135 over the past two years). Happy Valley’s median price has risen 6 percent to $380,000 in the past 12 months.

In the downmarket northern suburbs of Adelaide, both Salisbury and Salisbury North are very consistent markets. Salisbury (median house price $285,000) has recorded quarterly sales of 47, 49, 44, 54, 40, 42, 43, 43, 38 and 45 over the past 2-3 years. 

And at the more prestige end of the market, North Adelaide (median house price $1.04 million) had delivered sales of 58, 56, 56, 55, 64, 59, 57, 48 and 56 in the past couple of years. 

Australia abounds with markets like these, suburbs and towns that show great consistency in their level of sales. For investors who have patience and value steadiness, they’re good places to park your money.

Terry Ryder is the founder of hotspotting.com.au. You can  email him or follow him on Twitter.