Australian Property Hotspots Revealed

The suburbs that currently represent the best value property in Australia have been identified in a report released today.

The National Hotspots property report identified 24 property locations Australia wide that are likely to provide the strongest value for house purchasers. Across Australia, these suburbs have been chosen based on their location attributes, the value of housing in the area, the level of amenities in the suburb and the demographic mix. The locations identified should perform well and will suit both buyers looking to live in the home and investors seeking capital growth over the medium to long term.

The property hotspots chosen on a region-by-region basis are:

Sydney: Granville, Rockdale, Lidcombe, Riverwood, Waterloo

Brisbane: Keperra, Margate, Cannon Hill, Fairfield, Kedron

Melbourne: Chadstone, Ashburton, Brunswick, Flemington, Fawkner

Hobart: North Hobart

Canberra: Dickson

Perth: Bassendean, Thornlie

Adelaide: Thebarton, Glanville

Darwin: Rapid Creek

Regional Australia: Gulliver suburb, Townsville, Queensland
Redan suburb, Ballerat, Victoria

The particular standout suburbs identified are: Granville (Sydney); Chadstone (Melbourne); Keperra (Brisbane); Bassendean (Perth); and Thebarton (Adelaide).

The 24 hotspot suburbs identified include an interesting mix of older demographic areas where the majority of dwellings are owner-occupied but have great potential for renovation, and younger demographic areas where the dwellings are dominated by apartments and offer good value for money.

In addition, just about all the hotspots are in close proximity to retail amenities and restaurants, are well serviced by public transport and, most importantly, are all discounted or underperforming for their current location when compared with nearby suburbs. As a result, they are expected to perform well.

Besa Deda, St.George Bank’s Chief Economist said the Australian property market has proved resilient compared with the share market during the economic slowdown and over the last ten years.

Commenting on the results Ms Deda said: “Savvy home buyers and investors should look outside the square and consider the areas which have not attracted the same level of attention as traditional blue-ribbon locations. For example, some of the suburbs identified in the National Hotspot research include light industrial areas which are expected to eventually transform into residential areas with amenities,” she said.

Factors underpinning potential growth in residential housing markets

Low mortgage rates, the boost to the first-home-buyers’ grant, improved housing affordability, rising rental yields and relatively low vacancy rates have helped underpin a recovery in lending and sales for housing. Demographic factors are also underpinning the prospects for residential housing.

Population Growth
“There are important demographic fundamentals that shed a favourable light on the prospects for residential housing lending and prices over the medium to long term. Population growth nationally is running at its fastest pace in 40 years at a time when there is a national shortage of housing,” said Ms Deda.

Consumer Sentiment
Over the long term, consumer confidence levels have influenced housing sales volumes. This influence is not surprising given that the cost of the commitment to purchase property takes a level of confidence in the market. The Melbourne Institute-Westpac measure of consumer sentiment has risen in the last four consecutive months. It now sits well above the 100-point level that shows there are more consumers optimistic than pessimistic about the economic outlook.

Home Lending Up
Life was breathed into residential lending by significant cuts to interest rates and the government’s first home buyers’ boost. Housing finance commitments have witnessed a strong recovery, mainly in the owner-occupier segment.

Unemployment
Rising unemployment is one of the risks to the housing market recovery. So far the unemployment rate has not climbed to the levels feared earlier this year and last year. Indeed, since the global credit crisis began, there has been net job creation in Australia.