The best property investments for 2022: The Australian’s Money Cafe podcast with James Kirby

In The Australian’s Money Cafe podcast this week, Wealth editor James Kirby talks to Eliza Owen, head of research at CoreLogic on the types of property that may do best this year.

In this week’s Money Cafe podcast, Wealth editor James Kirby talks to Eliza Owen, head of research at CoreLogic on the types of property that may do best this year.

House prices across Australia are expected to grow by 5 per cent this year, with rentals also rising across the market suggesting total returns of somewhere between 7 and 9 per cent.

On this week’s show I talk with Eliza Owen, head of research at the specialist property researcher CoreLogic. Eliza says that inner city apartments failed to match the increases in detached homes in 2021 and there are particular economic drivers that could underpin bargains in these zones for long-term investors.

Owen explains that immigration – traditionally the factor that underpins inner city markets – has been virtually non-existent throughout the pandemic but recent moves to allow international visitors such as students back into the country could change the numbers in property.

From a regional perspective, Eliza Owen nominates southeast Queensland as the standout opportunity.

She points to inner city Melbourne, where prices have been weakest on a national basis as a potential ‘counter-cyclical’ play. The Victorian capital has still been struggling in recent months while other cities such as Brisbane are powering ahead.

From a regional perspective, Owen nominates southeast Queensland as the standout opportunity as the Gold Coast and Sunshine Coast capture much of what both homeowners and investors are looking for: cheap prices coupled with improving fundamentals including positive internal migration trends.

No property investment discussion is complete without a review of interest rates. We cover the changing consensus on rate movements with some previously conservative forecasters moving their rate increase predictions forward to the middle of this year.

CoreLogic’s head of research Australia, Eliza Owen.

And, as Owen explains, if that acceleration in rate rises comes to pass, the commercial banks will not be waiting for the central bank to move before they lift mortgage rates for both owner occupiers and investors.

Our question of the week comes from listener Dave who asks:

I believe most economic enterprises agree with the philosophy of the user pays principle. In a rented house the tenant is responsible for paying all electrical charges, eg: consumption and connection. Yet with respect to water usage the tenant is only charged water consumption. Connection and sewerage charges remain with the landlord. Yet these charges are generally far greater than consumption. How can this situation be changed to make it fairer and more aligned with the user pays principle?

If you have any questions on any aspect of investment for Wealth editor James Kirby and his guests on The Australian’s Money Cafe send to [e-mail]