How to pick the next hotspot

It looks like it's spread out too. If I pick on Bundaberg North at the moment, it's still got quite a high level of inventory. So if you pick out one particular suburb, but when you zoom out to the SA3 region, you can see that really, really strong Train line. So, and again, that highlights one of the benefits of starting with this SA3 data set, which is a little bit bigger and a little bit better behaved. So yes, we can still see a downward trend there as well, even at that suburb level, even though that Underberg North is up around the eight month currently.

Which is a great point to call out because now what we're saying is, yes, the SA3s are trending, but we have to go deeper. When you're doing your on the ground searches or you're working with professionals or you're looking at data points at a suburb level, this is where you can start to do those filters to get the best possible choice. And on the note of Bundaberg, a lot of infrastructure there, Kent. You know, the new public hospital has been approved, over a thousand jobs impacting there. That's huge.

That is massive. And over a billion dollars in spend too. When you put that to a population level there, the dollar spend is massive. On top of that, you've got the airport upgrades, the port potentially has been proposed for expansion. And then just other smaller things in terms of, you know, your aquatic centers and precincts and so forth happening.

So my favorite expansion project is the Bundaberg Brewery. The drinks expansion is on play. The rum. The rum. That's it.

So there's stuff happening in Bundaberg that definitely is bringing a load of confidence and the data showing the change. If we now move on to the next state, Queenslanders, you've had your big plug in there. We're going to be moving on now. How about we talk about New South Wales? This is an interesting one.

Yeah, well, my part of the world. So we've got three areas. But again, our call out here is a lot of these markets were already starting to warm up. We're probably in that balanced position, not cold, not hot about a year ago. They're all pretty hot now.

So we've got three locations, three SA3s. Coffs Harbour. I think most people know Coffs Harbour if you've ever had a banana or travelled north. Upper Hunter, which is a really interesting one. I think this one you could do a podcast on all by itself.

And Kempsey Nambucca. And the Kempsey Nambucca area is interesting because it covers a very vast range of different suburbs and coastal communities and inland communities. So the price ranges of select suburbs across that region are very, very large. I'm glad I got you here, Kent, to say Nambucca because I would have said Nambucca. So potato, potato.

It's all right. Nobody passing judgment. Well, I mean, you know, the point to make with New South Wales is, OK, why aren't we calling out the Newcastles, the Wollongongs, the Orange, the Dubbo's, the Mudgee's? They're all starting to get pretty strong. And the heat over there has picked up a fair bit.

So we have moved those markets very, very recently, potentially from a early adopter market over to our hotspot markets. And as a result, you could borderline say Coffs Harbour now moves in that category too. But the change has been phenomenal, which is what we want to call out, a 54% drop in inventory. Yeah, if you look across these three regions, you're pretty much on average, say it's halved. Inventory levels have halved in the last 12 months across these three regions.

And it's the same thing on the rents. We've seen an 83% in Nambucca, Kempsey. We've seen a 76% drop in Coffs Harbour and Upper Hunter, a 64% drop in their vacancy rates, all sitting with a zero in front. And it doesn't make it easier with some of the bad weather we've had as well in recent times, because that in some of these pockets is going to make the displacement even more so. That's my big concern.

I did a bit of an article on this with the newspaper last week, and I think I've got another one going out this weekend on the whole implication of the flood. So you've got displacement of people. You've got people moving out who are owner-occupied that are moving out. They need their house fixed. Where do they go?

They're probably going to have to be stuck in a hotel because there's no rental houses available. A lot of these markets before the floods were below 1%, which is our crisis territory. So big implications for that area. But let's just give some suburbs to these regions so people understand. So the Upper Hunter, we picked out a suburb there.

Most people would know Musselbrook or heard of Musselbrook. So that's one example. The list price median there is about $329,000. The inventory level for that particular suburb at the moment is just below five now. So it's in that balanced territory, but it was up above eight a year ago.

What a change. Big change. So that's a significant shift. The next one down is one of those spots that's just beautiful. If you ever see photos or you've ever visited, it is picture postcard beautiful.

Southwest Rocks, stunning. So that's at the moment, the median there is $585,000 for a list price. You'll find on average about 25 properties there. Now, probably the biggest and most interesting thing here is sometimes when we see a big drop in inventory or we see a high level of inventory in one period of time, the first question I say is, hang on, has there been a house and land release? And that certainly was the case here.

So a grain of salt, I think, with the inventory level at the suburb level here, because we went off 10. 62 down to four. I think that's purely off the back of a few house and land releases that are being absorbed. Some of those are still on the market now, but stunning, stunning suburb. And the last one on my, I've got two extra.

I've got obviously Southwest Rocks, Nambucca Heads fits into that as well, which is another good spot, and Coffs Harbour. So again, that's probably the biggest suburb of the lot. Interesting, Coffs Harbour's got a reasonable share of medium density type dwellings. Most of these other areas we're talking about, unless you're right in the towns or the cities, most of these are all fairly low density areas as well. And with that, you made a really good call out, Kent, on some of the rapid shifts of inventory that can occur.

Because we're using a relatively short timeframe, we're trying our best to capture change. And 12 months is a great time to capture change. However, at the same time, Kent called out, you know, you called out one of those changes, which is new build properties coming to a market and being absorbed. So the key thing is when you're looking into these locations, as well as going deeper into the suburb and on the ground, it's also important to take a forward looking analysis. Right now, the analysis is current to short term trends, which is inventory, rents, and days on market.

The forward looking could be the locations within Townsville, Toowoomba, Coffs, or wherever it is, and making sure we're not sticking to the outskirts where there's a higher risk of land release. And B, you're paying close attention to building approvals in the pipeline, as they're also a great lead indicator of the upcoming supply and release of supply over the next few years. So just wanted to make sure people are aware of that, because these rapid shifts in inventory are all great. But is it an absorption of a high supply market that may return again because of the release of more developments? Or is it because there's a genuine shift in demand that's pushing it down and it's likely to stay tight for the next few months?

So it's up to you guys to make sure we're all doing our homework on it. Which is, I think, one of the reasons why the beachside suburbs do quite well, because you can't really do a 360 degree radius and build around it. Yeah, big call out there, right? You can limit it just by where you are placed in terms of being in the fringe or not. So key call out there for sure.

And if we move over to Victoria, again, like New South Wales, we have very few regions that we can pick out as changing, but not yet super hot. The regions of Victoria have been an interesting one. In the last couple of podcasts, we called out the Melbourne exodus. And whilst not a massive impact for Melbourne's detached dwellings, the exodus and the attached dwelling impact has seen a lot of people move to our regions of Victoria and a lot of people move to different states. And what that's done, not the only reason, because many of these regions in Victoria, your Ballarats, your Geelongs, your Warrnambools, Bendigos and so forth, many of these areas were actually trending quite strongly over the last three years.

And so they've just had another fire put underneath them to just push ahead, to stay strong, which is why we're actually only left with one location in Victoria as somewhere that's in the early adopter, not quite hotspot yet. Wellington. Yes. And so that belongs to, I think a lot of people would know Latrobe, Gippsland. So that's the SA4 that it belongs to, the parent, but we picked out Wellington.

So I think a lot of people in the other states wouldn't know Wellington, or they think there's a Wellington up in New South Wales as well. So we would remember Latrobe, but I keep on seeing some of these suburbs pop up all the time, you know, in and around Mowi and those locations. So quite affordable. That's probably the call out here. So I think, you know, have a look at the median price there.