The Hotspotting 'Top 5 Cheapies With Prospects' report revealed areas in Perth, Adelaide, and Brisbane were ones to watch in the first half of this year.
The report considered the combined power of the following property metrics:
- Rising sales activity, with potential for capital growth;
- Plenty of houses at affordable prices;
- Strong infrastructure, both existing and planned; and
- Proximity to major jobs nodes.
Hotspotting Director Terry Ryder said the five locations were sometimes considered to be the “ugly ducklings” of city real estate, but they also had strong prospects for capital growth.
“Ugly duckling is an odd term for something you would recommend to real estate investors, but the term is apt,” Mr Ryder said.
“The ugly duckling of the fairy-tale was considered unappealing because those around it didn’t understand what it was. Yet, it ultimately evolved into a graceful swan.
“There are suburbs with similar qualities. They are places considered unattractive by those looking through uneducated eyes – but they have the potential to transform into real estate swans.”
A recent survey commissioned by Aus Property Professionals found 39% of respondents said they would prefer a metro investment property over a regional one (19%).
Director of Aus Property Professionals Lloyd Edge said investors shouldn’t overlook regional areas, particularly those of Forster (NSW), Gorokan (NSW), and Wodonga (VIC).
“There’s a common misconception that metro is always better than regional,” Mr Edge said.
“However, there are a lot of factors that determine whether an investment property is a good deal or not, and location is only one of them.
“At the end of the day, it all comes down to each individual investor, and what their strategy and goals are.”
Below are the eight markets to keep an eye on according to Mr Ryder and Mr Edge.
1. Playford, SA
Mr Ryder said the property market in the city of Playford is experiencing rising momentum, fuelled by a revitalised economy and affordability that appeals to first-home buyers and investors on a budget.
“The RAAF Base in Edinburgh is the engine room of the local economy, and is stoking it further with billions of dollars being spent on technology, equipment, and infrastructure,” he said.
“This follows the 2020 opening of the Northern Connector, a 16km six-lane motorway linking northern Adelaide to key freight transport infrastructure.
“The region’s property market is further characterised by very low vacancy rates and rental yields, which are among the highest of the country’s major cities.”
2. Armadale, WA
Despite downturn pressures, Perth has maintained high levels of sales activity which includes the Armadale LGA.
“It is the fourth fastest-growing local government area in Western Australia and has some of the most affordable houses of any capital city,” Mr Ryder said.
“Armadale now features a new shopping centre, a world-class water sports venue at Champion Lakes, a 320ha business park, and improved transport links.
“The Armadale CBD is also marked for higher density housing in the future, while the business parks are designed for continued expansion, and new schools are being built.”
3. Salisbury, SA
Located 25km north of the Adelaide CBD, the city of Salisbury is one to watch according to Mr Ryder.
“The City of Salisbury has defied the negative impacts of Covid through a construction boom made up of medium-scale projects, which are generating thousands of jobs,” he said.
“These projects have successfully steered the local economy through the worst years of the pandemic in 2020/2021 and property prices have responded with double-digit growth, with most suburbs rising 20% or more.
“This growth continued right through 2022 and is expected to continue in 2023.”
4. Gosnells, WA
The availability of government incentives for first home-buyers along with affordable housing has attracted large swarms of young couples and families to the Gosnells area.
“Strategically located on Perth’s south-east transport corridor, and on the Armadale Train line, it is easily accessible to the Perth CBD and the Kwinana and Rockingham employment nodes,” Mr Ryder said.
“In addition, Gosnells and the surrounding suburbs have been earmarked for future infrastructure development by the Federal Government, encouraging business, industrial, and residential projects.”
5. Ipswich, QLD
To the Sunshine State, Mr Ryder believes Ipswich is likely to offer strategic buying potential this year given its affordability, proximity to employment nodes, and population growth.
“For some years it has been one of the fastest-growing regions in south-east Queensland and it has become one of the top two SEQ regions for jobs growth,” he said.
“Other core elements of Ipswich’s appeal are accessibility, affordability, and infrastructure.
“The Warrego and Cunningham highways and Ipswich Motorway, together with rail links, ensure the Ipswich region is well serviced by transport while many suburbs have median house prices in the $400,000s and $500,000s.”
6. Forster, NSW
While some investors consider NSW to be a bad investment, Mr Edge wants to remind buyers the state has multiple markets that are still experiencing growth and providing high rental returns.
“Forster on the mid-north Coast, has continued to experience growth in 2022 with an 18.8% increase on the median house price, following 20.4% in 2021,” he said.
“This is a popular coastal town with beautiful beaches and an affordable lifestyle, still attracting lots of buyer interest and positive market activity.”
7. Gorokan, NSW
“Gorokan - on the New South Wales Central Coast - has also continued to enjoy growth in 2022, reporting 10.8% on the median house price, after 27.5% in 2021,” Mr Edge said.
According to Realestate.com.au, Gorokan’s median house price is $700,000 while units are $540,000.
Houses in Gorokan rent out for $470 per week with an annual rental yield of 3.5%, and units rent for $415 per week with a rental yield of 4.1%.
8. Wodonga, VIC
Mr Edge recommends Wodonga as a place investors should watch carefully.
Wodonga is Victoria’s fastest-growing regional city, reporting an 18.2% increase on the median house price in 2022, following 26.3% growth in 2021.
The regional city is the site of an Australian Army logistics base and training centre for army technical apprentices. It is also home to La Trobe University and Wodonga Institute of TAFE.
With a slow-down in demand due to interest rate rises and falling property prices, 2023 is presenting opportunities for savvy investors to re-enter the market.
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