The start of the new decade is primed for some lucrative opportunities for investors. With the country’s property values bouncing back to peak levels from a few years ago, the search for the best suburb for property investment is on.
Some suburbs are set to experience price growth of more than $100,000, while others may benefit from government infrastructure projects. Here are suburbs across the country blossoming this year.
Suburbs across the harbour city are set to see price growth of more than $100,000, according to Select Residential Property (SRP) director Jeremy Sheppard.
House prices in Bronte, Paddington, Collaroy Plateau, and Davidson are set to jump by more than $100,000. Meanwhile, home values in Allambie Heights and Narraweena are expected to increase just below the $100k mark.
“With a drop in interest rates, all of a sudden, buyers priced out of these markets are back in with a chance,” says Sheppard.
The suburb of Bangor in the Sutherland Shire of Sydney is also expected to witness a 7.5% increase in median values. Currently, it has a median price of around $1.02m, which could jump by $76,000.
“About 28 kilometres south of the city, Bangor has a relatively affordable median house price, in Sydney terms, as well as being located near the Georges and Woronora rivers, which makes it an attractive proposition for both homebuyers and investors," he adds.
Heathcote in Southern Sydney is also tipped for price growth, the suburb may witness a 7.1% gain this year.
Melbourne property prices are set to jump this year, influenced by lower interest rates and strong population growth.
The Victorian capital finished 2019 with a 6.1% quarterly gain in housing values, according to a market forecast by Upside.
Meanwhile, the coastal suburb of Brighton is poised to rise as a top property hotspot this 2020.
“A relaxed, coastal feel perfectly describes the affluent bayside suburb, which also boasts some of the best schools in Melbourne in addition to the quirky, bright-coloured bathing boxes that are a distinguishing feature of the Brighton shoreline. Perfect for growing families and those looking to invest for the future," the study explains.
Carlton, considered as the best inner-city suburb in Melbourne, also shows growth potential for this year. The suburb topped the list for lowest median unit value in Melbourne last year at $364,918. It also generated the highest yield rental return at 7.1%.
Carlton presents as the perfect inner-city living sanctuary for young professionals, couples, and students alike. Bursting at the seams with (a) vibrant atmosphere and a wealth of eateries and entertainment, everything is essentially walkable, according to the study.
Investors should also look out for regional Victoria, according to Terry Ryder, founder of Hotspotting.
Bendigo and Latrobe Valley are two locations in regional Victoria that could be the “best bet” for buyers this year.
“Regional Victoria has been the upstanding property market in Australia over the last two years. It's outperformed all the major capital cities, with some regional cities having double-digit annual growth to their median house prices," he tells the Herald Sun.
Price growth in regional Victoria started in Geelong and Ballarat and now making its way into these locations.
There may be some lucrative opportunities for investors in some Perth suburbs, according to property investment consultancy Momentum Wealth.
The market experienced fairly subdued conditions in 2019, but some suburbs improved over the year, said Real Estate Institute of Western Australia (REIWA) president Damian Collins.
Buyers need to target tightly held suburbs with indicators that may give them some benefits from improving market conditions, said Momentum Wealth Research Advisor Shaun Strickland.
Areas surround popular school zones could benefit from the limited supply.
“While these suburbs generally experience high levels of demand from owner-occupier markets, which offers greater stability during market downturns, the lower density zoning surrounding these areas also tends to favour family-style housing on larger lots, providing fewer opportunities for new developments and competing stock,” he says.
Bateman and Carine are some of the suburbs recording annual house price increases. The suburbs experienced growth in house value of 2.4% and 5.3%, respectively, during the September 2019 quarter.
Perth is also set to benefit from upcoming infrastructure projects.
“Infrastructure upgrades such as new transport links can provide an important catalyst for capital growth due to the increased accessibility and amenity they bring to a suburb, both of which can help to drive higher levels of demand from buyers and renters,” he adds.
The suburb of Forrestfield could benefit from the development of three new stations under the Forrestfield-Airport Link.
Investors looking to benefit from Perth’s relative affordability may consider looking at “bridesmaid” suburbs—next in line to areas already experiencing growth, said Strickland.
“We saw this during the last market upturn, with suburbs such as Manning experiencing high levels of buyer demand following significant price increases in areas like Como and South Perth, with those who timed their entry into this suburb well benefitting significantly from ensuing price growth,” he explains.
The suburbs of Rocklea, Spring Hill, and Everton Park in Brisbane are expected to be property hotspots this year.
Investors continue to eye Rocklea due to its $397,273 median house value. The suburb also has the highest rental yield at 5.1%, says Upside’s market forecast.
Another Brisbane suburb on the radar is Spring Hill, which possesses strong potential for growth. It has the highest yield in rental return for units in Brisbane at 6.9%.
Meanwhile, Everton Park offers a suburban lifestyle for investors looking for homes. About four in five houses in the suburb are detached homes. It is a family-friendly area roughly 25 minutes north of the city centre.
Rest of Australia
Other suburbs across the country are also poised for growth this year.
An eastern suburb of Launceston in Tasmania is poised for strong price growth this year, according to SRP.
St Leonards, Tasmania could witness a 7.5% growth in median house price this year, thanks to strong demand. Median price in this suburb currently sits at $269,000, which could grow by $20,000 this year.
"While it's only located about 10 minutes from the centre of Launceston, St Leonards offers a mix of residential and semi-rural homes, with an affordable price tag to boot," says Sheppard.
The suburbs of Rosetta and Berriedale in Hobart are also poised for a 6.7% growth. Current median values in these areas are $423,000 and $339,000, respectively—these may grow by $28,000 and $23,000, respectively.
In Adelaide, the suburb of Birkenhead is expected to grow by 7.3% this year.
“Birkenhead is located on the Lefevre Peninsula, so its borders feature reaches of the Port River. On top of that, it is only about 14 kilometres from Adelaide's city centre, making it an easy commute for homeowners or renters in the area," Sheppard says.
Crestwood, a suburb at the Queanbeyan that borders NSW and the Australian Capital Territory, is also tipped for a value upswing. The suburb’s median price is projected to jump 7.3% in annual growth this year.