Bless my friends. Even those not involved or interested in property still try to take an interest in what I’m up to. One recently asked me to explain why there’d been such a difference between cities in recent years… but not in a “boring, real estate, bla bla kind of way”.
On the spot and not quite sure how to proceed, I tried to devise an adequate approach. We were in a bar celebrating another pal’s birthday and it was quite late. I struggled to concentrate over the excruciating screeching of some God-awful remixed Pitbull monstrosity.
Then it hit me. Music. Of course! I could use the powerful language of song to explain what I was pretty sure, in that bizarre moment, drives different markets. Rather than sing and try to compete with the DJ, I took her to the beer garden and used relevant real-life examples.
And here’s what I told her about some of the capitals.
Like a mid-90s Nokia mobile phone or Betty White, this remarkable city keeps on keeping on. In my view, it’s kind of like the Rolling Stones – still kicking, drawing a crowd and doing a moderately entertaining job of it all.
It’s a bit exciting and keeps people coming back for more. However, it goes through random and unpredictable periods of inactivity – one minute, the buzz is there (new building construction) and then it’s not (the past few years), so demand is often pent up.
And while there hasn’t really been an earth-shattering performance recently in the form of median price growth in Sydney’s case, most of us still have faith in its ability to rock again at some stage.
Tim McKibbin is the chief executive of the Real Estate Institute of New South Wales and a huge Rolling Stones fan (I’m just assuming), and thinks the middle range of the market has mostly weathered the storm. Those who’ve been hanging out aren’t likely to wait much longer, so he’s confident of a decent 2013.
If Sydney is the Rolling Stones, Melboune is Ozzy Osbourne. When it really wants to, the Victorian capital can turn it on and amaze absolutely everyone with its stellar performance. “Melbourne still has it!” we shriek in amazement.
Then, when it overindulges and has too much, er, supply, Melbourne crumples to the floor like a bit of a withering mess, barely coherent and showing no obvious hints of what’s coming next. That’s what we seem to be seeing at the moment with a projected oversupply of new apartments outpacing demand from buyers.
It’s unclear how long it takes Melbourne to pick itself up, pour a big cup of coffee and get cracking again. But if the actual Ozzy Osbourne can manage to stagger back into a studio with Black Sabbath, as happened last month, then all hope is not lost for Melbourne.
This complex and testy market is the Britney Spears of real estate. On a good day, it’s polished and mesmerising. On a bad day, it’s beating down paparazzi with an umbrella and shaving its head in the glare of the world’s tabloid media.
In recent years, the southeast corner has had to contest with post-GFC jitters and a mining industry lull, a sustained period of inactivity in the tourism sector and the devastation of the floods in 2011. Finally, the River City looks to be getting her mojo back, y’all!
In fact, during my most recent fireside and whisky chat (okay, a brief email exchange) with Anton Kardash, the chief executive of the Real Estate Institute of Queensland, I heard about the city’s improved activity since the early part of 2012. The outlook for next year is optimistic and it’s one shared by most in the industry, he told me.
Oh, Darwin. It’s such a quirky and random place. What it lacks in stability it makes up for in dramatic price surges, driven largely by peaks and troughs in the resources sector that dictate housing demand. These bursts of activity tend to come and go, with periods of relative normality in between.
For that reason, I think the Northern Territory capital is a bit like Psy. You know, that Gangnam Style guy. Everyone has gone a bit nutty over it, excitedly talking about it whenever the opportunity arises, and rushing to be part of the action.
Like the Ketchup Song and Macarena before it, this latest craze too will fade away once its 15 minutes is up. It’ll be a fun memory in years to come, very occasionally popping up on karaoke machines and perhaps at weddings or school reunions.
Of course, there’ll be something new and zaney to replace it. It might be in a matter of months, a year or longer. That’s part of the fun – if you knew exactly when it was coming, it wouldn’t be a surprise.
For the record, Real Estate Institute of NT chief executive Quentin Kilian reckons business confidence and housing demand will be sustained, and sees the market staying strong through 2013. He told me so while reenacting the Gangnam Style horse dance (not really).
Like Lady Gaga, many often muse that Perth has reached its peak and is bound for a fall. Then, on the back of a motorcycle or concealed within the womb of a giant devil sculpture, she emerges once more to critical acclaim.
Perth continues to hit the high notes, largely to the tune of Western Australia’s booming mining industry. There are fans (Little Monsters in Gaga’s world, in case you were curious) and there are critics. The naysayers reckon it can’t continue, that the fad will fade. But then, they’ve been saying that about Gaga since her first single four years ago.
Will Perth remain a success? Only time will tell… but Real Estate Institute of WA president David Airey, who also chairs the state’s Little Monsters fan club (I’m being facetious), thinks all signs are positive for the next year. Population growth remains strong, first homebuyers are coming back and confidence is improving.
If you’ve got any ideas about how our capital city markets compare to musical acts, especially those I can’t remember explaining to my friend (sorry Adelaide and Hobart!), feel free to share your thoughts.
Shannon Molloy is the deputy editor of Australian Property Investor magazine www.apimagazine.com.au