Australia’s top investment hot spots- John Edwards

New research released today from Onthehouse’s property data arm Residex, reveals Australia’s top suburbs for residential property investment, based on their latest predictions data.

Although property market growth is expected to stabilise in 2014, the data shows that some inner ring suburbs still offer strong investment potential.

We are expecting to see Sydney and Melbourne’s growth rates slowdown in the next six months and in other national markets next year.

Although inner ring areas often fall into the least affordable class compared to their suburban neighbours, the data indicates there are still opportunities for savvy investors, in the right suburbs.[sam id=43 codes=’true’]

The findings show that every capital city has inner ring areas that offer strong opportunities for investors. Sydney’s Bellevue Hill, Melbourne’s Malvern, Brisbane’s Bulimba and Perth’s City Beach all feature prominently in the national top 10 for predicted growth – with annual average rates of growth over the next five years of better than 8%.

From a national perspective, I’m expecting to see commentary from the RBA later this year that will affect consumer sentiment and again moderate growth.

This will mean changes in the recent strong national growth trends. Property investors will need to be cautious about which suburbs they invest in – particularly in inner city areas, which will deliver a very mixed range of returns.

Stable growth never occurs in a linear way. Overall, we expect to see a fall in growth by the end of the year, followed by two to three years of minimal to zero growth. Then by 2018, we are expecting to see a return to strong growth rates.

House value growth – top suburbs to 2019

City

Suburb

Median Value

Capital Growth,

Last Year

Rental Yield,

Last Year

Predictions,

5 Year % p.a.

Sydney BELLEVUE HILL

$3,384,500

1.31%

2.69%

10%+

Melbourne MALVERN

$1,674,500

7.68%

3.26%

10%+

Sydney ROSE BAY

$2,319,000

3.37%

2.62%

10%+

Brisbane BULIMBA

$897,500

4.29%

4.47%

10%+

Melbourne ELWOOD

$1,382,500

12.29%

3.41%

9%+

Sydney MOSMAN

$2,454,500

12.73%

3.60%

9%+

Perth CITY BEACH

$1,851,000

12.80%

3.30%

9%+

Brisbane NEW FARM

$1,170,500

6.65%

3.58%

9%+

Melbourne ST KILDA

$1,125,000

17.19%

3.71%

9%+

Perth MOUNT PLEASANT

$1,295,000

5.77%

3.10%

8%+

Source: Onthehouse.com.au / Residex

Unit value growth – top suburbs to 2019

City

Suburb

Median Value

Capital Growth, Last Year

Rental Yield, Last Year

Predictions,

5 Year % p.a. 

Melbourne ELWOOD

$532,000

6.12%

4.13%

8%+

Melbourne ST KILDA

$465,500

6.18%

4.51%

7%+

Melbourne RICHMOND

$507,000

6.41%

4.63%

7%+

Sydney NORTH BONDI

$752,500

12.07%

4.69%

5%+

Sydney MILSONS POINT

$1,061,500

15.43%

4.43%

5%+

Perth SUBIACO

$632,500

3.82%

4.88%

4%+

Perth CLAREMONT

$700,000

0.36%

4.48%

4%+

Perth WEST PERTH

$537,000

2.81%

5.67%

4%+

Brisbane WEST END

$489,500

6.12%

5.31%

4%+

Brisbane NEW FARM

$501,000

5.17%

5.11%

4%+

Source: Onthehouse.com.au / Residex

Units are predicted to deliver lower returns than houses, with the top inner ring suburbs returning an average of 4 to 8%growth per annum over the next five years.

Melbourne dominates the national top five – with Elwood, St Kilda, Richmond and Rhodes. While units in Sydney’s North Bondi, Perth’s Subiaco and Brisbane’s West End are predicted to deliver the top inner ring growth results in their respective cities.

Melbourne is defying past predictions. My feeling is that there is an oversupply of property, especially units, but demand is currently being propped up by three main factors: property developers are managing their units well; international buyers are supporting new unit sales; and higher public confidence is being driven by factors like good clearance rates at auction.

Anybody buying property over the next 12 months needs to be aware of the growth patterns, now more than ever it is important to do solid research around the market to back up your decisions with data and insight.

[post_ender]



Want more of this type of information?


John Edwards

About

John is Consulting Analyst for Onthehouse, Australia’s most comprehensive real estate portal, and Founder of Residex, a leading Australian research organisation providing quality information on the real estate market to government, financial institutions, valuers, real estate agents, accountants, solicitors and the general public. Visit www.OnTheHouse.com.au/


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