Top investment hotspots identified among suburbs where prices have fallen
Independent research provided exclusively to API Magazine has revealed 17 Australian suburbs where prices have fallen over a year but which represent great potential for property investors in 2024.
Property prices have risen in more than 80 per cent of suburbs but for investors looking for bargains there are still areas with investment potential that have yet to follow that broader market trend.
Capital city markets are running at very different speeds, with Perth the strongest market while Hobart and Darwin are flat or falling.
An independently commissioned report that set out to identify the best investment prospects among suburbs with house prices that have gone backwards over a year has revealed its top 17 locations.
A key criterion was that prices, while down over the year, had rebounded to some degree in the past quarter.
Jim Malamatinas, Head Buyers Agent and Director of A Game Property Advisory, who commissioned the report and shared its findings exclusively with API Magazine, said there are hidden gem suburbs that are still below their previous market value of 12 months ago in September 2022.
“This presents a great opportunity many property investors to incentivise them to re-enter or buy more property at a time during the worst rental crisis in over a decade.
“I believe there’s a good opportunity over the next six months to purchase a property at a competitive price – while many investors are still sitting on the fence waiting until interest rates level out or decrease in 2024 before they enter the market, but many will miss this excellent opportunity that presents itself right now, especially in the suburbs identified in this report,” Mr Malamatinas said.
The independent research identified 17 suburbs that have only started to bounce back in the last quarter but have not reached their peak median price of 12 months ago. Suburbs in each capital city were selected based on the following six criteria:
- suburbs with a median value of circa $1 million or less
- median price decrease over the last 12 months to September 2022 of up to 17.5 per cent
- rebound growth in the last quarter of up to 8 per cent
- 25 kilometres or less from the CBD (except Victoria and NSW up to 65km)
- 10-year average growth of 4 per cent and above
- vacancy rate of 1.5 per cent or below.
Top suburbs for investors where it is cheaper to buy than 12 months ago
Sydney
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Killarney Vale | $810,000 | $900,000 | -10.00% |
| Lisarow | $1,046,250 | $1,171,500 | -10.69% |
| Kincumber | $1,020,000 | $1,155,000 | -11.69% |
Melbourne
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Tootgarook | $870,000 | $980,000 | -11.22% |
| Crib Point | $750,000 | $858,750 | -12.66% |
| Selby | $832,500 | $1,000,000 | -16.75% |
Brisbane
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Carina | $967,000 | $1,085,000 | -10.88% |
| Oxley | $742,792 | $840,000 | -11.57% |
| Fairfield | $950,000 | $1,110,000 | -14.41%% |
Tasmania
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Taroona | $950,000 | $1,152,000 | -17.53% |
| Dromedary | $679,571 | $775,000 | -12.31% |
| Berriedale | $582,500 | $650,000 | -10.38% |
Perth
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Myaree | $840,000 | $950,000 | -11.58% |
| Stirling | $927,500 | $1,040,000 | -10.82% |
A.C.T
| Suburb | Typical asking price Sept 2023 | Typical asking price Sept 2022 | % Below previous market value |
|---|---|---|---|
| Watson | $1,003 500 | $1,150,000 | -12.74% |
| Macarthur | $912,500 | $1,050,000 | -13.10% |
| Kaleen | $997,500 | $1,126,500 | -11.45% |
Mr Malamatinas said he saw a short window of opportunity for property investors to purchase well located property below market value.
“The problem investors face is finding the pockets that have high rental demand and future growth that haven’t bounced back in growth.”
His prediction comes as property price growth has withstood eight interest rate rises, with a high possibility of another, to still notch up nine consecutive months of capital growth.
“This has all contributed to high the cost of holding onto mortgaged property, making it more challenging for many mum and dad investors.
“So many investors are selling up and exiting the market, contributing to the worst rental crisis in 11 years with a national vacancy rate at the record low of 0.9 per cent with some states below 0.5 per cent.”
Prestige market also taking off
While the research above focused on investor-friendly suburbs with house prices below the $1 million mark, the more costly prestige markets around the country continue to outperform the wider market.
Ben Esau, National Director of Residential, Herron Todd White, said on Wednesday (22 November) that there has been a number of notable prestige transactions in spring which, once known by the wider market, could potentially fuel further fear of missing out activity at the upper end of the market.
“While the $5 million to $10 million markets in Sydney and Melbourne may track more closely to the rest of the market, the $10 million-plus and prestige markets across other capital cities are still seeing strong demand coming up against limited stock.”
“Across the east coast, well-financed local, overseas and transitioning purchasers, as well as those whose relatively recent financial success, such as in start-ups or crypto currency, are also presenting a younger purchaser to create a broad and cashed up demand pool.
“In other markets such as Perth and Adelaide there is less overseas interest compared to the east coast but there is a relativity of what you can get for your prestige buck that is seemingly attractive to a returning resident or interstate mover,” Mr Esau said.
It was similar pattern in unit markets, with higher end properties performing well.
In Brisbane, for example, each of the 162 unit markets analysed by CoreLogic saw values rise in the past three months, while of the 305 house markets, only four had a quarterly decline.
The increase was led by the higher-end suburbs of Kalinga and Windsor, although the more affordable Redland Bay, spots of Macleay Island and Lamb Island also did well.
