Iluka and Ballina are two of only three towns in New South Wales to be deemed ‘property hotspots’ for 2009.

The third centre is Woolgoolga.

In the final RP Data Property Pulse report for 2008, RP Data’s leading property analysts – Tim Lawless and Cameron Kusher – combined to deliver their 2009 Property Hotspots Report Predictions, covering towns and cities around the country which they believe will present opportunities in 2009 for new buyers and investors.

Ballina headed the NSW hotspot list with a median house price of $422,500, a median weekly rent of $330 and a rental yield of 4.06 per cent.

Iluka was next with a median house price of $380,000, a median weekly rent of $300 and a rental yield of 4.11 per cent.

Woolgoolga’s results were $330,000, $300 and 4.73 per cent.

Mr Lawless said that while the world experienced erratic economic behaviours during 2008, the Australian property market proved its resilience by showing only modest value falls in most capital cities. 

Across the nation, median dwelling values declined by 1.24 per cent during 2008 to October, with house values falling by 1.55 per cent and unit values declining by just 0.29 per cent.

By comparison, share market values fell by around 40 per cent over the same period.

However, Mr Lawless believes that despite its proven resilience, the residential market is likely to be relatively flat for the majority of 2009.

“As ongoing economic uncertainty takes hold and people become more cautious about the fallout, factors such as rising unemployment will continue to have a dampening effect on residential property value growth,” he said.

“In saying this, I do believe there are a variety of factors that will act as market drivers such as falling interest rates, increasing affordability, rising rental rates, improving investment yields and a shortage of housing.”

Based on the RP Data Hotspots Report for 2009, the markets that are most likely to record good capital growth over the next 12 months are those that hold that ‘driver’ appeal. Mr Lawless believes that first home buyers and investors will be the first to jump on these suburbs.

However, for the first home buyer, the opportunity to buy is relatively short, with the bonuses in the current First Home Owners Grant closing at the end of the 08/09 year.

Investors who take advantage of the strong buying conditions are likely to be competing against first home buyers where, simultaneously, both groups will be targeting low entry point properties showing strong yields and where there is potential for long-term capital growth.

Looking at the upper end of the property market, RP Data’s Cameron Kusher believes that it will be the affluent-type markets which are likely to languish as demand declines based on economic factors including poor company profits, lower than expected bonuses, and severe pain in the equities and financial markets.

“As a result of these changes in the top end, holiday homes and tourism-driven investments will be affected and in many cases, there will be a lot more forced sales,” Mr Kusher said.

The 2008 RP Data Hotspot selections focus on houses and units. The selection is based on ‘strategic affordability’ and identifies those suburbs that represent good value for money based largely on location, necessities and social options.

RPA Data stresses that the hotspot selections are based on what they deem will be the best-performing areas during 2009.