Cheap high-growth, low risk suburbs

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We reveal 18 suburbs where vacancies are almost non-existent, competition for rents is minimal and the current supply and demand situation suggests immediate, large-scale capital growth is coming.  

Like in any market, prices in the property market are driven largely by one underlying factor – supply and demand.

If people want to live in a place, if there’s demand, but there are a limited amount of residences for them to live in or buy up, prices will go up over time.

This is according to Redwerks research director and creator of the DSRscore Jeremy Shepherd, who says that a high imbalance between supply and demand represents a greater statistical likelihood of immediate capital growth.

Using markets where high demand is imbalanced by a low level of stock on the market and where vacancy rates are particularly low, Shepherd has compiled a list of 18 suburbs (see bottom) with the potential to show remarkable prices growth, without being risky investments.

He asserts that, apart from low vacancies and high demand, what makes these investment destinations especially low risk is the fact that none of their median prices exceed $550,000.

Each of these markets also has a low proportion of renters. “[This] is preferable so there is less competition among landlords for tenants,” says Shepherd, adding that each suburb represents a fairly large market where there are normally a fair degree of listings.

The suburbs

Included in these markets is northern Perth suburb Craigie, a location sandwiched between the Indian Ocean coast and the Mitchell Freeway.

It is approximately 20km north of the CBD, and its location close to the freeway and accompanying rail links mean that its transport links are excellent. Popular beaches are close by and the area is well served for amenities.

What could be a factor in boosting prices growth is that the area is a lot more affordable than many of its neigbours, despite being home to mostly professionals earning well above the WA median income.

Queensland student and young professional favourite Wishart is also on the list, while Lenah Valley, a suburb 5km north-west of the Hobart CBD, remains a Tasmanian suburb to keep an eye on.

The latter, like Craigie in WA, is surrounded by a host of much more expensive suburbs, which could be a factor in its strong recent supply and demand situation.

High growth, low risk suburbs:

State Post code Locality  Typical value  Renters Vacancy DSR 
ACT 2906 CONDER  $        524,000 18% 0.36% 29
ACT 2904 FADDEN  $        568,000 20% 0.00% 28
ACT 2904 GOWRIE  $        499,250 20% 0.48% 33
NSW 2120 WESTLEIGH  $        449,000 13% 0.00% 36
QLD 4053 STAFFORD HEIGHTS  $        419,500 24% 1.62% 29
QLD 4122 WISHART  $        526,000 27% 0.97% 30
QLD 4054 KEPERRA  $        406,000 27% 1.12% 30
SA 5092 MODBURY HEIGHTS  $        332,500 19% 0.85% 29
SA 5051 BLACKWOOD  $        494,000 11% 0.00% 29
SA 5041 COLONEL LIGHT GARDENS  $        567,500 19% 1.71% 29
TAS 7008 LENAH VALLEY  $        367,500 29% 1.86% 26
VIC 3154 THE BASIN  $        429,000 11% 0.00% 36
VIC 3158 UPWEY  $        486,250 11% 2.18% 32
VIC 3767 MOUNT DANDENONG  $        525,000 10% 0.00% 35
WA 6026 KINGSLEY  $        532,500 12% 0.32% 35
WA 6025 CRAIGIE  $        445,000 16% 0.00% 31
WA 6024 GREENWOOD  $        493,125 15% 0.43% 34
NSW 2774 MOUNT RIVERVIEW  $        413,750 14% 0.00% 32

This data was compiled using DSRscore (DSRscore.com.au). Always do your own research before investing in property. For more in-depth analyses, forecasts and insights into where the property market is headed, subscribe to Your Investment Property.

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