Mogul reveals red hot Sydney suburbs

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One of the country’s leading real estate moguls has revealed the Sydney and regional suburbs that he expects to outperform the rest of the pack for capital growth.

Writing in his Autumn 2012 Market Review, McGrath Estate Agents CEO (and judge on the TV renovation show The Block) John McGrath has tipped the following suburbs as his best picks for future growth in the Sydney metro area (scroll down to see the list):

Suburb

House/apartment

Median Price

12 month Growth

Average Annual Growth

Gross Rental Yield

Average GPO Distance

Balmain East

House

$1,550,000

-24%

6.8%

4.5%

2km

Coogee

House

$1,581,000

-12%

7.7%

2.6%

7km

Hunters Hill

House

$1,445,000

-8%

7.4%

3.6%

7km

Killara

House

$1,410,000

-13%

5.9%

3.9%

12km

Palm Beach

House

$1,800,000

-28%

10.3%

2.6%

31km

Cammeray

Apartment

$575,000

-7%

3.6%

5.0%

5km

Coogee

Apartment

$648,250

-5%

4.4%

4.7%

7km

Monterey

Apartment

$457,000

-11%

5.3%

4.7%

12km

Ryde

Apartment

$440,000

-8%

7.0%

4.5%

11km

Sydney CBD

Apartment

$528,000

-4%

2.5%

6.4%

1km

Source: John McGrath/RP Data, Dec 2011

If those median prices look a bit too rich for your blood, then McGrath suggests that the following regional markets are worth further inspection:

Suburb

State

Median Price (houses)

12 month Growth

Average Annual Growth

Gross Rental Yield

Average GPO Distance

Bowral

NSW

$519,000

-3%

7.3%

4.2%

99km

Burleigh Waters

QLD

$530,000

-7%

8.9%

4.5%

79km

East Ballina

NSW

$532,500

-3%

8.8%

4.2%

600km

Katoomba

NSW

$320,000

-2%

5.8%

5.2%

85km

New Lambton

NSW

$425,000

3%

8.9%

4.6%

114km

Dickson

ACT

$642,500

6%

11.5%

4.1%

3km

Kambah

ACT

$480,000

1%

11.1%

5.0%

14km

Lighthouse Beach 

NSW

n.a.

n.a.

n.a.

n.a.

n.a.

Terrigal

NSW

$561,250

-1%

5.5%

4.2%

52km

Thirroul

NSW

$650,000

4%

6.3%

3.9%

57km

Source: John McGrath/RP Data, Dec 2011

Overall, McGrath believes that the property market is in a state of flux, with uncertainty being created by the European debt crisis, Australian job losses and “the banks signalling that the days of routinely following the Reserve Bank’s moves on interest rates may be over”.

Overall, however, he paints a cautiously optimistic picture for the year ahead, citing increased buyer enquiries fuelled by last year’s interest rate cuts.

“There’s also a sense among buyers that after waiting it out in 2011, now is the time to buy when lower rates allow greater borrowing power and excellent value remains on offer,” he said.

He tips suburbs within 10km of the Sydney CBD to do well, and predicts that higher rewards may be found in Southeast Queensland.

“The Gold Coast market is not out of the woods yet but those who have the capital to buy and hold medium term will see this market recover more strongly over the next 3-5 years than most other markets hit hard by the GFC,” he said.

Newcastle also hits McGrath’s radar as a promising prospect.

“It’s a developing market that is yet to be truly appreciated for its excellent lifestyle and growing local economy, with the booming Hunter Valley mines also on its doorstep,” he said.

Visit the where to buy now section of our property investment forum to discuss this year’s hotspots with investors and experts.

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