Much of the media coverage in the past few months regarding property prices has been on Sydney and Melbourne - "green shoots" recently started to appear in these markets, driving a turnaround in median national housing prices following more than a year of falls.
Furthermore, Sydney and Melbourne's property markets are also on-track to record double-digit price growth in 2020.
But some suburbs will record higher growth than others, and according to Riskwise Property Research CEO Doron Peleg, lower-end properties - properties with higher crime rates that can be gentrified - shouldn't be overlooked, with many of the suburbs earmarked by Riskwise in February 2018 outperforming the market in that time.
"Our nationwide research actually found gentrifying suburbs with high crime typically deliver strong price growth and outperform the local benchmark," Mr Peleg said.
“We found affordable high-crime areas with significant gentrification are likely to produce strong price growth, particularly when dwelling prices in the inner and middle rings are severely unaffordable.
“For example, even in high danger areas of New York City and London, etc, provided there is strong population growth and severe unaffordability throughout these cities, these crime areas still increase in popularity and therefore experience price increases.”
Mr Peleg says high-end properties, while doing well to bounce back from recent downturns, are far more sensitive to credit restrictions and investor activity compared to low-end ones.
“That's why high-end properties were impacted dramatically during the downturn but also bounced back dramatically when reversing the negative factors, as we are seeing in prestige areas of Sydney and Melbourne,” he said.
“Lower-end properties are less subject to credit restrictions and investor activity which actually make them a great buying opportunity. In fact, in some cases areas, such as Geelong, even benefited from the lending restrictions as buyers looked for more affordable options.”
Buyer activity is mixed at the moment.
The latest lending to households data from the Australian Bureau of Statistics show a rise in lending commitments to households rose 1.1% in September and 3.8% in August - it has now grown for four successive months.
But investor and first home buyer activity fell by 4.0% and 1.9% respectively.
Auction clearance rates, on the other hand, have risen in both Sydney and Melbourne (our two largest property markets) and now comfortably sit above 70%.
“The RBA’s interest rate cuts, some loosening of credit restrictions, significant improvement in buyer confidence and increased auction clearance rates provide very strong indications regarding these markets,” Mr Peleg said.
“Buyer sentiment in relation to housing measures has noticeably improved and the Westpac-Melbourne Institute’s House Price Expectations and Time to Buy a Dwelling Indices show a consistent trend.
“As we predicted immediately after the election and in our previous Risks & Opportunities Reports, the market has materially improved with affordable areas that have shown resilience recovering well. Other areas, including lucrative ones that experienced strong price reductions, are now leading the way to this recovery.”
Read: 15 Sydney suburbs tipped for growth in 2020
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