Lalor Park price growth highlights importance of consistency for investors
When investors are looking for good places to buy, consistency is a quality worth seeking. And the factor where consistency matters the most is in sales activity.
Some markets deliver steady levels of home sales, regardless of the booms or busts going on around them.
In each quarterly edition of The Price Predictor Index published by Hotspotting, we have spotlight the consistency markets – and we nominate a location as a nation’s most consistent market.
We have a strong focus on consistency markets because these are solid places for both home-buyers and investors.
The places we call the consistency markets sit in the middle of the spectrum, between the growth regions and the declining ones.
These are locations which record a consistent rate of sale, quarter after quarter, regardless of external events. They represent safety for investors.
And while they are often not boom markets, places with this high level of even performance usually produce solid price growth over time.
They’re the housing market’s version of the “slow and steady wins the race” story.
In our new Summer edition of The Price Predictor Index, our award for the nation’s outstanding consistency market goes to Ulladulla in the Shoalhaven LGA in regional New South Wales.
It has sold between 43 and 58 homes in each of the past 13 quarters. Few locations in the country achieve that level of steadiness.
Ulladulla has a median house price of $510,000, after a 15 percent rise in the past 12 months.
To further illustrate the kind of growth that can happen in these steady performers, the winner in our Spring 2017 edition - Echuca in Victoria - had a 7 percent annual rise, while in the Winter 2017 edition our “most consistent market” - Sunbury on the northern fringe of Melbourne - had a 10.4 percent annual increase.
Generally in this report we look for locations where sales activity is rising, as these places are likely to deliver price growth. But the figures presented here for Ulladulla, Echuca and Sunbury show that steady market performers can achieve solid price growth as well.
As it’s not just short-term growth. Lalor Park in Sydney’s western suburbs, another noted consistency performer, has a long-term growth average (average annual growth in median house prices over 10 years) of 10 percent for year.
Greystanes in Sydney, which consistently sells 70-75 houses per quarter, averages 8.5 percent a year in median price growth.
Camp Hill, a suburb of Brisbane, has been averaging 7 percent per year.
Caroline Springs, a very steady sales market in western Melbourne, has averaged 7 percent per year. Frankston, which is both consistent and prolific in south-eastern Melbourne, has averaged 8 percent.
Some investors chase boom markets, seeking exponential short-term growth, and often end up with disappointing results.
There’s a lot to be said for the steady performers, which provide both safety and good long-term capital growth.
Very often, the tortoise out-performs the hare.
Terry Ryder is the founder of hotspotting.com.au