Hotspotting Terry Ryder & Tim Graham

There are numerous reasons why we think Melbourne and Victoria is worthy of consideration by property investors, notwithstanding the concerted efforts by the state government and some local councils to force investors to sell up and get as far away from Victoria as possible.
Melbourne and Victoria are underpinned by one of the nation’s strongest state economies, according to CommSec’s State of the States report, and there has been a notable uplift in sales activity since the start of 2024, pointing to elevated price growth as the year unfolds.
But perhaps the most compelling evidence, pointing to growing strength in the Melbourne market in particular, is the latest population data from the Australian Bureau of Statistics.
The ABS figures describing population growth in 2023 are largely dominated by Melbourne.
While the annual growth rate for Australia was 2.4%, Melbourne rose 3.3% - which was the highest in the nation except for Perth.
The National Top 10 list for the fastest growing local government areas in Australia – that’s the percentage growth rate for the year - included three Melbourne LGAs, with the City of Melbourne the No.1 fastest growing municipality in the nation.
The Nearby City of Yarra and the City of Melton in the western suburbs also made the top 10 national list.
In terms of LGAs with the largest growth, the actual number of new people added to the population, four of the national Top 10 were in Melbourne – the City of Melbourne and three outer-ring growth areas, the municipalities of Wyndham, Casey and Melton.
At a suburb level, most of Australia’s fastest growing suburbs are in the Greater Melbourne area.
That includes the nation’s fastest growing suburb, Rockbank in the western suburbs of Melbourne.
Of the top 12 fastest growing suburbs in Australia, 9 are in Greater Melbourne.
And of the nation’s top 30 fastest growing suburbs, 16 are in Greater Melbourne.
Now, to be clear, we’re not suggesting that population growth is the over-riding factor in choosing where to buy real estate. It’s one of many factors to take into account.
But, considered alongside all the other factors, it’s a pretty strong endorsement of Melbourne’s prospects – it’s a tale of growth and the remarkable thing is, Melbourne hasn’t delivered any major price growth recently.
That, I believe, will emerge later in 2024 and beyond.
 

Media loves the storyline that first-home buyers are competing with wealthy investors for properties – and losing because investors apparently have a huge advantage.
Like so much that’s written and spoken in news media about the housing market, it’s a work of fiction. The polar opposite is, in fact, the truth.
The biggest competition for first-home buyers in the market is not investors, but home buyers other than first-time buyers.
The largest cohort in the market, at any point in time, is home buyers who already own a home, have equity in that home and are upgrading – or, in some cases, down-sizing.
These are buyers who are older, with equity, higher incomes and borrowing power – and they can easily over-power a young novice in the market.
The biggest problem for first-home buyers is not investors, it’s the incredibly high costs of getting into the market because of the policies, decisions and actions by politicians and bureaucrats.
Just take a look at the cost of a house-and-land package anywhere in Australia. Given that the cost of constructing the average brick-and-tile house is now close to half a million dollars, not including the land cost, it’s hard to find a new home in a housing estate for under $700,000. It’s considerably more in the biggest cities.
The greatest lie of all is that investors have a big advantage over first-home buyers in the market. Presumably media says that because of their persistent misunderstanding about negative gearing.
The reality is quite the opposite. If it comes down to a competition between a first-home buyer and an investor, the first-home buyer has several big factors in their favour.
First-home buyers have high levels of government assistance, whereas investors do not. Quite the opposite, investors increasingly face major impediments from government.
First-home buyers are granted stamp duty concessions, so they have to pay little or nothing compared to the massive tax imposed on investor buyers.
Investors are slugged with much higher interest rates by lenders, so that if you have a first-home buyer and an investor of similar ages and incomes, the first-home buyer has considerably greater borrowing power and therefore has a competitive advantage over the investor who earns the same income.
Keep in mind that, according to the latest research data, most investors are young, on average incomes and need to buy as affordably as possible, which means they cannot pay high prices for properties in competition with other buyers.
Investors have several other disadvantages compared to home buyers. 
As well as paying higher interest rates, they pay higher council rates and they pay higher rates of insurance. And they have to pay taxes that home buyers do NOT have to pay, including land tax and capital gains tax.
The only potential positive on the investor side of the equation is negative gearing, which in some cases, but certainly NOT ALL, may reduce the amount of tax the investor pays – but that does nothing to increase the investor’s borrowing capacity or ability to pay a high price for a property.
The whole narrative around first-home buyers being priced out of the market by so-called wealthy investors is a lie.
And indeed, the latest official data on lending to buy property shows that there has been a 13% increase in first-home buyer activity this year, compared to the same time last year.

If you want to sell real estate, very often the greatest selling point is the location.
If the location has  …
a strong diverse economy creating jobs, 
a steadily growing population with strong increases projected well into the future,
good existing amenities and a significant spend on new infrastructure
… then it has many of the credentials for capital growth.
The problem for many real estate professionals - in taking advantage of growth factors like that in their location- is accessing all the key information, analysing it and then presenting it in a way that’s easily accessible to potential customers. 
Many people in the industry just don’t have the time or the resources to do all that.
That’s where Hotspotting’s unique custom reports service comes in. It saves you time and it projects your business as professional, informed and successful.
The Hotspotting team can create location reports on individual suburbs, clusters of suburbs, local government areas, towns and regional cities, and on major capital cities.
The reports are provided with the client’s branding and location details, as well as (if you choose) the Hotspotting brand to provide the assurance and credibility of an independent third-party research source.
This is a custom report service you cannot get anywhere else.
Our customers love it. One of them says ...
“Hotspotting was a pleasure to deal with when arranging my Custom Report. As a buyer’s agent for many years, I was astounded by how much effort and research goes into their reports. Their communication was great and I am extremely happy with the final result.”
And another of our regular customers commented …
"The research provided by hotspotting.com.au has been an integral part of our success and the growth of our business. The ability to access independent research reports on the locations we believe are best for our clients, with our branding, has made it easier to show our customers the merits of the places we think have the strongest growth credentials."
We love to get feedback like that, because we regard our custom reports as one of our most important product services.If you would to find out more our Hotspotting’s exclusive custom reports service, contact me on ryder@hotspotting.com.au or go to the hotspotting.com.au website and select “products” on the menu at the top and then “custom reports”.

Want to get into a key market BEFORE prices start to take off?
Feel that you may have missed the boat with media favourite Perth? In many ways, the answers to these questions are the essence of smart investing.
Most property investors are herd animals, diving into markets when they read that prices have risen 15% or 20% in the past year – or 50% in the past three years. 
Buying in such a market means you are likely buying at – or after – the peak of the market. The smart money would have been there 2-3 years ago – and is now focused on places that are early in the growth cycle. That’s why Melbourne makes more sense than Perth for property investors seeking to buy strategically for capital growth.
The Melbourne market, in simple terms, is situated where Perth was three years ago, before prices started to rise and rise. The Melbourne market is underpinned by one of the nation’s strongest state economies and boosted by population growth amongst the highest in the country. It hasn’t had the price growth of other cities in the past year but has had a big uplift in buyer activity recently – often a precursor to elevated prices. And vacancies are ultra-low, putting upward pressure on rents.
 
To find out more about why Melbourne and Regional Victoria should be strongly considered by property investors, join leading national buyers’ agent Kate Hill of Adviseable in this webinar recording hosted by Hotspotting founder Terry Ryder.
In this webinar, you will learn ….
**Why now is a good time to consider Melbourne and Regional Victoria
**Which metrics point to capital growth in Victorian markets
**Why recent rental reforms should not deter investors
**Which price points are attracting the greatest buyer demand
*Why attached dwellings need to be considered
*Which Melbourne suburbs and regional centres deserve the most attention
To connect with Kate Hill, you can reach here at kate@adviseable.com.au or www.adviseable.com.au
 

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We have sat down with a number of them to get exclusive insights into their strategies, tips, and personal journeys. Our pre-recorded interviews bring you valuable knowledge and advice from Australian property experts who walk the walk and practice what they preach. Learn from their mistakes, successes, and unique perspectives on property investment.
These interviews are a must-watch for anyone looking to build a successful investment portfolio and achieve financial freedom. With over 71% of investors owning only one investment property, we understand the challenges and uncertainties that come with growing your portfolio. That's why we have curated a series of interviews that exclusively feature investors with multiple properties. They represent the top 1% of Australian investors and have achieved remarkable success in their investment journey.
Our pre-recorded interviews are available for you to watch at your convenience, so you can take in all the knowledge and insights at your own pace. Hear firsthand how they navigate the ever-changing property market and make profitable investment decisions. You'll be able to walk away with practical tips and strategies that you can implement in your own investment journey.
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Part of the obsession by economists with interest rates as the only thing that matters in the housing market is the notion that the Reserve Bank spends a large amount of time discussing the housing market before deciding what to do about interest rates.
As with so many things, economists are wrong about that.
One of the most popular definitions of insanity is doing the same thing over and over again, but expecting a different result.
My own definition of insanity is the average Australian economist discussing real estate.
In essence, those two definitions are essentially the same thing.
Economists, especially those working for the big four banks, tend to believe that everything that happens in residential real estate is dictated by trends with interest rates.
In their simplistic view of things, rising interest rates means falling prices and falling interest rates means a property boom.
They’re utterly wrong about that, because there are always forces more powerful than interest rate movements dictating what happens in real estate – including, right now, the serious imbalance between supply and demand.
The other thing economists and other commentators get wrong is their belief that the property market is the over-riding influence in RBA decisions about interest rates.
In reality, the property market has little or no impact on RBA decisions. There have been repeated RBA statements over the years telling us that the board does not consider its role to include control or influence the property market.
We have seen it in their decision making in the past couple of years, when the prime consideration was trying to bring down the rate of inflation.
So now we have a string of mistaken assumptions from economists leading to the forecast that real estate will struggle late this year because the expected cut in interest rates won’t happen.
The first mistaken assumption is that the board will decide NOT to cut interest rates later this year because property prices are rising. As I said, they have made it clear they’re fundamentally not the regulators of the real estate market.
The second mistaken assumption is that cutting interest rates would cause a property boom - or that keeping interest rates at their current levels will suppress the market.
Economists are clearly not students of history.
In the late 1980s we had interest rates rising and rising to levels far higher than today and ultimately as high as 17%, if you can believe that – and despite those obscenely high and rising interest rates, property prices kept rising and rising. 
It was one of the most spectacular property booms in the nation’s history.
In the early years of this century, we had several years of interest rates high and rising, and property prices kept on increasing.
And then again last year, 2023 had repeated increases in interest rates and – notwithstanding the doomsday forecasts of economists – house prices rose strongly in most locations, including well above 10% in a number of our capital cities.
Meanwhile, the years before Covid had extremely low interest rates but property prices were falling and in 2020, the year of the lockdowns, interest rates went to record lows but there was no property boom (although prices did show moderate growth).
When markets boomed in 2021, it was driven by a host of factors, including a high level of government incentives and spending to generate economic recovery.
So, in summary – whether or not the Reserve Bank decides to cut interest rates later in the year will depend on their view of inflation and the state of the national economy. Events in the real estate markets will NOT dominate the conversation.
If they do decide to cut interest rates, it will NOT generate a property boom. 
The big factor will continue to be the shortage of dwellings, regardless of any decisions about interest rates.