- Buyers and investors are increasingly seeking out affordability and good prospects for capital growth
- Hotspotting report reveals 5 locations with promising prospects
- The metrics for the prospects includes infrastructure and proximity to job nodes
As property prices and interest rates soar, buyers and investors are increasingly seeking out affordability, higher than average rental yields as well as sound prospects for capital growth, according to new Hotspotting report, Top 5 Cheapies with Prospects, City Edition 2023.
What makes a prospective city?
The report covered the combined aspects of the following property metrics:
- Rising sales activity, with potential for capital growth
- Plenty of houses at affordable prices
- Strong infrastructure, existing and planned
- Proximity to major jobs nodes
Hotspotting Director Terry Ryder said affordability is driving property consumers, now more than ever.
“Over the past 12 to 18 months, when some markets across Australia have been struggling, the ones that have remained buoyant have been those areas where homebuyers and investors can find properties at attainable prices – with rising interest rates making this even more of an imperative,” Ryder said.
He added investors increasingly want to target locations where they can buy relatively cheaply, because these areas have higher yields, which offset higher interest rates.
“The key objective is to find cheaper areas that offer above-average rental yields but also have credentials for good capital growth; the good news is that this is achievable,” he said.
City of Playford, Adelaide
Ryder says affordability is a key element of Adelaide’s appeal, with Playford, the city’s cheapest precinct, generating strong price growth.
“Playford has ranked as one of the consistent performers for strong annual growth in dwelling values,” he said.
The suburbs comprising the City have all seen strong sales activity, with Ryder noting: “Every suburb in the City of Playford recorded double digit growth in their median house prices in the 12 months to March 2023.”
According to SQM Research data, prices for the postcodes within Playford (5112 through 5121) are floating around the $450,000 mark.
Weekly asking property prices for 5114 (part of Playford)
City of Canning, Perth
Hotspotting General Manager Tim Graham says the upsurge in Perth’s property market has continued in 2023.
“The market started to turn around in 2020, at the start of the pandemic, with its busy market coupled with strong buyer demand continuing since then,” he said.
Graham added many of Perth’s stand-out municipalities are also at the affordable end of the market, including the City of Canning, which can attribute its popularity to its cluster of affordable suburbs with excellent amenities, green space and train links.
Many suburbs were noted to have affordable median prices between $435,000 to $555,000, with the suburb also home to more expensive, riverfront locales, too.
Weekly asking property prices for 6102 (including Bentley, a suburb in the LGA)
City of Salisbury, Adelaide
In terms of sales activity and price performance, Adelaide has been one of the nation’s top markets throughout the pandemic, according to Ryder.
“Salisbury East has been identified as one of the Top 10 suburbs in Adelaide with buyer demand more than doubling in the past 18 months and house prices in the $400,000 range,” he said.
“The suburb also has multiple schools, the Cobbler Creek Recreation Park and proximity to employment zones and major retail and commercial nodes.
“Data shows that 70% of Greater Adelaide’s suburbs recorded a value rise over the 12 months to March. Units saw an even bigger increase, with 87% of Adelaide suburbs recording a value rise,” he said.
Low vacancy rates continue for the LGA, with Ryder noting that all postcodes have either 0.5% or lower vacancy rates, among the lowest in the country.
City of Armadale, Perth
Graham says the Perth property market has been strong for the past 3 years, remaining steady through the worst of the pandemic and the interest rate hikes.
“In a trend being experienced in other major markets across the nation, many of Perth’s stand-out municipalities are at the affordable end of the market,” he said.
“This includes the City of Armadale, which has 3 key strengths – affordability, strong yields, and excellent transport links.”
Weekly asking property prices for 6111 (including Kelmscott, a suburb in the LGA)
Inala Precinct, Queensland
Inala’s affordability, its location within 20 kilometres of Brisbane’s CBD, strong transport links, plentiful amenities, and services, makes it well placed as a real estate performer, according to Ryder.
“This established suburban precinct is surrounded by new developments – with the broader Inala precinct experiencing a multibillion-dollar evolution of new suburbs, including major master-planned communities,” he said.
“This is creating new infrastructure, services and job opportunities within striking distance of locals.”
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