Revealed: Suburbs where you’ll make $$$, suburbs where you won't

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Which of Australia’s property markets have been predicted to achieve average annual growth of 6%-plus over the next eight years? And which ones are expected to achieve a paltry 0.41% per year on average? Read on for the latest predictions from Residex.

Residex has released its latest figures and, while few of the markets covered achieved significant capital growth in the 12 months to February, the data provider has predicted average annual growth over the next eight years of more than 5% for several areas.

Top of the pack are Sydney houses, which Residex expects to grow by 6.48% on average over the next eight years. Houses in the ‘NSW country’ category take second spot, with 6.36%, and then Brisbane houses (5.83%) and QLD country houses (5.24%).

However, the long-term predictions for many areas are certainly cautious, with Victorian country units, for example, only being tipped to grow by 0.41% per year on average. Residex also has low expectations of South Australia, with SA country units (0.55%), SA country houses (0.78%), Adelaide units (0.81%) and Adelaide houses (1.33%) all recording low predicted average annual growth rates.

Looking at the growth data over the last 12 months, Residex notes that our housing markets are still in trouble, “however not all markets are falling in value and the position is better than what we have seen on a number of occasions in the last 12 months”.

Perth and Sydney performed the best in the last month while Melbourne, Adelaide and Brisbane are among the major cities that continue to provide poor outcomes. The annual fall of values in these cities are significant. For Melbourne, we have to go back to 1991 to find an annual fall in value greater than the fall we are currently seeing and it is also provides the lowest rental yield in Australia.”

On the rental front, however, Residex notes that most markets are showing a continued increase in average monthly rents, and that this tightening of the rental market will be positive news to investors.

The results:

You may notice that the predictions for Australia are higher than those of any individual state. When questioned on this discrepancy on the Residex website, Residex CEO John Edwards posted the following response:

"This is because we are selecting the median property in Australia and looking at its predicted outcome. We do not weight numbers together when we are undertaking calculations.
i.e. If we are looking at Sydney, then we consider the median for Sydney.
If we are looking at all of N.S.W., then we consider the median property for all of N.S.W."

Visit our property investment forum to discuss where to buy with the property investment community.

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Comments
  • Curious says on 22/03/2012 01:59:16 PM

    Hi, how can both in houses and units, the Australia wide growth rate be at 7.7% and 6.45%, respectively, which is far above that of any and all growth rate forecasts of the cities and country areas? Sydney with its 6.48% and 4.49%, respectively, should at least be above the Australia wide statistics if it is the nation's leader. Something is definitely not right here and I would not give credence to these statistical growth forecasts.

  • YIP says on 22/03/2012 02:12:53 PM

    Thanks for your comment. A similar comment was posted on the Residex website, and here is the response that Residex CEO John Edwards posted on their site:

    "This is because we are selecting the median property in Australia and looking at its predicted outcome. We do not weight numbers together when we are undertaking calculations.
    i.e. If we are looking at Sydney, then we consider the median for Sydney.
    If we are looking at all of N.S.W., then we consider the median property for all of N.S.W."

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