Top 20 investment-grade suburbs

The list includes investment grade suburbs where buyers have a negotiating edge
The edge is determined by considering price growth over the past decade
Only five metro suburbs made the top 20

With the cost of almost everything rising across the board, which suburbs can you invest in with confidence?

Research commissioned by Well Money has found the top 20 investment-grade suburbs where buyers have a negotiating edge.

The company determined the top 20 suburbs by considering two main points: places where demand is softening and therefore favouring buyers, and where owners had at least 70% price growth over the past decade and therefore buyers know vendors could afford to sell for a 10% discount.

Well Money then filtered out suburbs:

That had a SEIFA socio-economic score of four or less,
Where the share of rental housing was less than 10%,
Where the vacancy rate was 1.5% or more,
Where the yield was 3% or less, and
Where the inventory level was six months or more.

To ensure the suburb favoured buyers, the research also excluded suburbs:

That had fewer than five listings,
Where the number of listings had grown by less than 3 month on month, and
Where the inventory level was 1 month or less.

And finally, the research considered the aforementioned 70% price growth criterion to ensure buyers could have plenty of bargaining power.

The rankings were based on net price gain over the past 10 years.

What did the research find?

Of the top 20, five suburbs were in metropolitan areas with the remainder in regional locations. Also, of the top 20, 18 were suburbs where houses are the preferred investment, with the remainder unit markets.

The top 20 suburbs are situated in New South Wales (13), Queensland (5), Victoria (1) and Tasmania (1).

“Every one of these 20 suburbs has enjoyed a net price gain of at least 107% over the past decade. Furthermore, they all have a vacancy rate under 1.5%. So the data suggests these are locations that would be easy for investors to rent out right now and would probably enjoy strong capital growth over the long-term,” said Well Money CEO, Scott Spencer.

“Also, these are suburbs where investors have a negotiating advantage right now, for a
couple of reasons. First, demand has been falling in these locations. Second, if investors
reacted by offering a 10% discount, they’d know vendors would probably be able to accept because they’d be surrendering only a small share of the considerable profit they’d made over the past decade.

Mr Spencer also noted that, “It’s important for investors to carefully examine their financial position before taking action, because it’s risky to buy if you’re not confident you could repay a mortgage if interest rates were to continue to rise.”

The top 20

Rank	State	Suburb	Postcode	Property type	10-year gain
1	NSW	St Huberts Island	2257	House	174%
2	NSW	Empire Bay	2257	House	174%
3	QLD	Tugun	4224	House	151%
4	QLD	Currumbin Waters	4223	House	151%
5	NSW	Woongarrah	2259	House	135%
6	QLD	Twin Waters	4564	House	132%
7	NSW	Horningsea Park	2171	House	118%
8	NSW	Bilambil Heights	2486	House	118%
9	NSW	Winmalee	2777	House	117%
10	TAS	Hobart	7000	Unit	116%
11	NSW	Albion Park	2527	House	116%
12	NSW	Ropes Crossing	2760	House	116%
13	NSW	Dee Why	2099	Unit	116%
14	VIC	Marong	3515	House	115%
15	NSW	Cooranbong	2265	House	115%
16	NSW	Prestons	2170	House	114%
17	NSW	Fern Bay	2295	House	114%
18	NSW	Hamilton North	2292	House	114%
19	QLD	Little Mountain	4551	House	107%
20	QLD	Meridan Plains	4551	House	107%

The details

St Huberts Island (Gosford, NSW)

Indicator	Result
Median price – June 2022	$1,500,000
Net price gain over past 10 years	174%
Years of profit lost if vendor sells for 10% discount	0.54 years
Suburb inventory level	2.1 months
Vacancy rate	0.0%

Empire Bay (Gosford, NSW)

Indicator	Result
Median price – June 2022	$950,000
Net price gain over past 10 years	174%
Years of profit lost if vendor sells for 10% discount	0.54 years
Suburb inventory level	1.1 months
Vacancy rate	1.2%

Tugun (Coolangatta, QLD)

Indicator	Result
Median price – June 2022	$1,185,000
Net price gain over past 10 years	151%
Years of profit lost if vendor sells for 10% discount	0.62 years
Suburb inventory level	2.0 months
Vacancy rate	0.7%

Currumbin Waters (Coolangatta, QLD)

Indicator	Result
Median price – June 2022	$1,200,000
Net price gain over past 10 years	151%
Years of profit lost if vendor sells for 10% discount	0.62 years
Suburb inventory level	2.8 months
Vacancy rate	1.1%

Woongarrah (Wyong, NSW)

Indicator	Result
Median price – June 2022	$900,000
Net price gain over past 10 years	135%
Years of profit lost if vendor sells for 10% discount	0.69 years
Suburb inventory level	1.8 months
Vacancy rate	1.1%

Twin Waters (Maroochy, QLD)

Indicator	Result
Median price – June 2022	$1,330,000
Net price gain over past 10 years	132%
Years of profit lost if vendor sells for 10% discount	0.71 years
Suburb inventory level	1.4 months
Vacancy rate	0.9%

Horningsea Park (Bringelly – Green Valley, NSW)

Indicator	Result
Median price – June 2022	$955,000
Net price gain over past 10 years	118%
Years of profit lost if vendor sells for 10% discount	0.78 years
Suburb inventory level	1.4 months
Vacancy rate	0.7%

Bilambil Heights (Tweed Valley, NSW)

Indicator	Result
Median price – June 2022	$930,550
Net price gain over past 10 years	118%
Years of profit lost if vendor sells for 10% discount	0.78 years
Suburb inventory level	2.3 months
Vacancy rate	0.0%

Winmalee (Blue Mountains, NSW)

Indicator	Result
Median price – June 2022	$900,000
Net price gain over past 10 years	117%
Years of profit lost if vendor sells for 10% discount	0.79 years
Suburb inventory level	1.3 months
Vacancy rate	0.0%

Hobart (Hobart Inner, TAS)

Indicator	Result
Median price – June 2022	$800,000
Net price gain over past 10 years	116%
Years of profit lost if vendor sells for 10% discount	0.79 years
Suburb inventory level	1.9 months
Vacancy rate	1.4%

Albion Park (Kiama – Shellharbour, NSW)

Indicator	Result
Median price – June 2022	$837,000
Net price gain over past 10 years	116%
Years of profit lost if vendor sells for 10% discount	0.79 years
Suburb inventory level	1.2 months
Vacancy rate	0.5%

Ropes Crossing (Mount Druitt, NSW)

Indicator	Result
Median price – June 2022	$841,000
Net price gain over past 10 years	116%
Years of profit lost if vendor sells for 10% discount	0.80 years
Suburb inventory level	1.6 months
Vacancy rate	0.6%

Dee Why (Warringah, NSW)

Indicator	Result
Median price – June 2022	$964,000
Net price gain over past 10 years	116%
Years of profit lost if vendor sells for 10% discount	0.80 years
Suburb inventory level	1.4 months
Vacancy rate	1.2%

Marong (Heathcote – Castlemaine – Kyneton, Victoria)

Indicator	Result
Median price – June 2022	$630,000
Net price gain over past 10 years	115%
Years of profit lost if vendor sells for 10% discount	0.80 years
Suburb inventory level	3.8 months
Vacancy rate	0.0%

Cooranbong (Lake Macquarie – West, NSW)

Indicator	Result
Median price – June 2022	$837,000
Net price gain over past 10 years	115%
Years of profit lost if vendor sells for 10% discount	0.80 years
Suburb inventory level	1.4 months
Vacancy rate	0.5%

Prestons (Liverpool, NSW)

Indicator	Result
Median price – June 2022	$986,000
Net price gain over past 10 years	114%
Years of profit lost if vendor sells for 10% discount	0.81 years
Suburb inventory level	1.1 months
Vacancy rate	0.9%

Fern Bay (Newcastle, NSW)

Indicator	Result
Median price – June 2022	$860,000
Net price gain over past 10 years	114%
Years of profit lost if vendor sells for 10% discount	0.81 years
Suburb inventory level	1.3 months
Vacancy rate	0.0%

Hamilton North (Newcastle, NSW)

Indicator	Result
Median price – June 2022	$885,000
Net price gain over past 10 years	114%
Years of profit lost if vendor sells for 10% discount	0.81 years
Suburb inventory level	1.3 months
Vacancy rate	0.0%

Little Mountain (Caloundra, QLD)

Indicator	Result
Median price – June 2022	$826,000
Net price gain over past 10 years	107%
Years of profit lost if vendor sells for 10% discount	0.85 years
Suburb inventory level	1.5 months
Vacancy rate	0.8%

Meridan Plains (Caloundra, QLD)

Indicator	Result
Median price – June 2022	$718,400
Net price gain over past 10 years	107%
Years of profit lost if vendor sells for 10% discount	0.85 years
Suburb inventory level	2.0 months
Vacancy rate	0.2%

Disclaimer: This article contains general information and should at no time be considered advice to the reader. The reader should always verify their situation with the relevant certified professionals before taking any further steps.