- Affordable areas undergoing gentrification are ones to watch out for, promising strong growth.
- Hotspotting's 'Cheapies with Prospects' reports shows the top locations set to shine.
- Looking for the Ugly Ducklings of city real estate can be a smart move for property investors.
There are still plenty of property markets that offer investors good returns and affordable property prices despite recent price growth.
Analysis by Hotspotting for its latest ‘Cheapies with Prospects’ reports identifies the locations that are set to outperform in the future in both capital city and regional markets.
Hotspotting General Manager, Tim Graham says Cheapies with Prospects are the Ugly Ducklings of city real estate, with strong potential for capital growth.
“Like the fairytale character, they may be initially undervalued but can develop into valuable assets over time,” Mr Graham said.
Many of today’s in-demand property markets, such as Richmond, Balmain, and Bulimba, started out as Cheapies with Prospects—former industrial areas that have been transformed through urban renewal.
“The demand for affordable housing options has led to these areas performing better than more expensive ones in the higher-interest-rate environment,” he states.
“Research shows that these affordable areas experiencing gentrification have some of the strongest price growth in major cities.”
Tim Graham, Hotspotting
Mr Graham clarifies that the way to identify potential Cheapies with Prospects was to look for rising sales activity which is generally a precursor to future price growth.
Affordability, strong infrastructure, and proximity to major job hubs are also important.
“We consider this combination of factors as a powerful indicator of real estate investment potential,” he adds.
In regional Australia, he says Burnie in Tasmania is a Cheapie with Prospects. The far north-west suburb is a key city in the Cradle Coast Region. It is known for its abundant agriculture, forestry, minerals, and tourism resources, making Burnie an important hub for cruise ship visitors to Tasmania.
Weekly asking prices for Burnie 7320
Vacancy rates for Burnie 7320
The city’s prosperity is being driven by both the Federal and State Government’s focus on the Port of Burnie, the largest seaport in Tasmania. The Port is currently undergoing major upgrades, along with its road and rail connections to other parts of the state, to support the growing exports of forestry and minerals.
“Burnie’s property market is experiencing renewed activity, with rising house sales and attractive rental yields,” Mr Graham said.
Median house prices start at just $348,000 while yields are mostly in the 5% range and rents are rising.
In the capital cities, Mr Graham said Darwin was a Cheapie with Prospects because of its affordability and high yields.
Its economy is being driven by ongoing infrastructure projects and despite a slow 2023, the property market has seen a resurgence in the past six months with a record 495 dwelling sales in the December quarter.
For investors and owner-occupiers alike, the combination of affordable $500,000 house prices, attractive rental yields, and low vacancy rates make Darwin an attractive choice.
Rental yields for Darwin
Vacancy rates for Darwin
