- The top five range from CBD locations to outer ring suburbs.
- Affordable locations include Armadale and Salisbury.
- Two Perth locations made the top five.
The Australian property market is well into the spring selling season, a time when both nature and the real estate markets blossom.
Despite a 2022 malaise, with soaring interest rates tempering transaction activity, this year has seen price rise after price rise. PropTrack recently found that four capitals hit new peaks, and while the quarterly rate of price rises slowed, according to CoreLogic, the month-on-month figure accelerated.
Top five cheap locations
Hotspotting’s latest City Cheapies with Prospects ranks affordable locations that are oustanding with respect to population growth, infrastructure programmes, and capital growth prospects over the next six months.
The research considers factors such as rising sales activity and potential for capital growth, available dwellings at affordable prices, strong infrastructure both existing and planned, and proximity to major job nodes.
- City of Melbourne, metro Melbourne,
- City of Salisbury, northern suburbs of Adelaide,
- City of Armadale, southern suburbs of Perth,
- Southern Moreton Bay Islands, south east Queensland, and
- City of Canning, south eastern suburbs of Perth.
Hotspotting director, Terry Ryder, said the latest city cheapies with prospects encompass a variety of local government areas primed for super capital growth in the future.
“The City of Melbourne market remains a favourable option for long-term investors because of excellent yields and low vacancies.
In addition, home buyers are attracted by the strong local economy, excellent liveability, and good transport links.”
Terry Ryder, Hotspotting
Ryder noted the Adelaide region of Salisbury is currently seeing high investor demand owing to its low vacancy rates, rising rents, and strong rental yields.
“Along with affordable prices, this attractive combination is providing strong opportunities for entry-level investors,” said Ryder.
Hotspotting general manager, Tim Graham, said the Armadale region of Perth features some of the most budget-priced houses of any capital city, and also offers strong infrastructure, services, and amenities.
“Armadale is also the fourth fastest-growing LGA in Western Australia and is strategically located in Perth’s south-east transport corridor, with access to large employment nodes,” said Graham.
“In the Southern Moreton Islands region of Greater Brisbane, Macleay and Russell islands offer median house prices in the mid-high $300,000 range. This affordability, together with significant lifestyle appeal, has seen demand and sales activity rise since 2020.”
Ryder said the City of Canning in Perth has also seen strong demand across home buyers and investors.
“With the City of Canning experiencing strong growth – particularly in the number of families moving to the area – demand for residential dwellings, infrastructure, and amenities is high,” he said.
“The City Centre Regeneration Program aims to ultimately transform Canning into Perth’s ‘southern CBD’ and will feature 10,000 homes for 25,000 new residents.”
City of Melbourne
“Despite facing challenges during the pandemic, Melbourne has shown resilience and stability in its property market,” said Ryder.
The city has several major projects playing its favour, according to the report, including the suburban rail loop, North East Link, biomedical precinct, Docklands development, Melbourne Square project, and the Southbank Arts precinct.
The report also noted the city has strong population growth and good rental yields.
“However, the rising interest rates and shifting lifestyle demands have caused investors and homeowners to look at options such as units and townhouses instead of standalone houses.”
The City of Melbourne, with its high-density dwellings making up 86% of homes, has become an attractive destination for both living and working, Ryder said.
“Its strong economy, with major businesses, universities, hospitals, and government services, has been further bolstered by ongoing infrastructure projects such as the North East Rail Link and the proposed Suburban Rail Loop.
“These developments are expected to bring in significant investments and create thousands of jobs, ensuring continued growth and stability in Melbourne’s property market.”
City of Salisbury
Defence projects, the Gawler train line electrification, and several other major projects play in the favour of the City of Salisbury.
The city has also put in a robust performance across the pandemic by undergoing a construction boom, according to Graham.
This boom is made up of medium-scale projects that have created thousands of jobs, helping to bolster the local economy during the pandemic, he said.
“As a result, property prices have seen significant growth, with some suburbs experiencing 20 per cent annual growth. This pattern has continued into the first half of 2023,” Graham said.
“The presence of government investments, totalling over $4 billion, in the defence sector has further contributed to the construction boom, which has attracted various industries such aerospace, cyber-security, and food and beverage manufacturing.
“As a result, major companies have established themselves in Salisbury, leading to increased employment opportunities and a thriving property market.”
Affordability was another key factor, alongside strong industrial activity, making it a popular choice with both investors and renters.
“As a result, vacancy rates are extremely low, with some postcodes reporting a rate of only 0.5 per cent,” said Graham.
“Rents are also increasing, making rental yields strong. Overall, the combination of affordable prices, a booming economy, and strong investment opportunities make Salisbury an ideal location for entry-level investors.”
City of Armadale
Not to be confused with Armadale in Victoria or Armidale in New South Wales, this Perth locale has been among Hotspotting’s top picks for several reports.
Affordable housing and strong population growth are among the factors playing in its favour, along with several multibillion-dollar projects including ship building, container port, lithium plant, and more.
“This local government area boasts budget-friendly housing options and excellent infrastructure, services, and amenities,” said Ryder.
“As a result, Armadale has become the fourth fastest-growing LGA in Western Australia.
“Its strategic location near major employment hubs and plans for development and infrastructure projects by the Federal Government make it a desirable place for both businesses and residential properties.”
The sustained growth of this area is reflected in its remarkably low vacancy rates, which are well below one per cent, he added.
“Overall, there are significant growth and opportunity prospects for the property market in Armadale and the wider Perth region.”
Southern Moreton Bay Islands
Located between Brisbane and the Gold Coast, in the southern half of Redland Bay, the locale is home to circa 8,000 people.
“Regular passenger ferries make it easy to commute from the islands to major job nodes such as the Brisbane CBD, Brisbane Airport, and the Port of Brisbane in under 60 minutes,” said Graham.
“There are two main islands, Russell and Macleay, as well as Lamb, Coochiemudlo, and Karragarra islands.
“Two precincts in the Southern Redland Area are marked as Priority Development Areas, with plans for a new marina, upgraded infrastructure, and job opportunities.”
Graham said the median house prices on Russell and Macleay islands are in the mid to high $300,000 range, making them the most affordable locations in Greater Brisbane.
“This, coupled with the islands’ lifestyle appeal, has led to an increase in demand and sales activity since 2020,” he added.
City of Canning
Rounding out the top five, this affordable Perth location is being touted as Perth’s future ‘Southern CBD’; it is currently home to the state’s largest shopping centre – Westfield Carousel, and some of Perth’s largest industrial hubs, according to Ryder.
“Plus, it is strategically located on Perth’s south-east transport corridor, close to the expanding Western Trade Coast hub (WTC) and the CBD,” he said.
“Other significant local infrastructure projects include the Thornlie-Cockburn Link, which will be Perth’s first east-west cross-line connection.
“It’s little wonder the LGA is experiencing strong population growth, with residential construction expected to continue well into the 2040s to satisfy increasing demand.”