A new report from St George Bank and property research firm RP Data has revealed 24 property hotspots around the country, with a clear focus on suburbs within a 10 kilometre ring of capital cities.
But St George chief economist Besa Deda has warned that property buyers need to tread carefully in the current market, with the threat of further interest rate rises and affordability concerns likely to mean conditions remain soft.
“In the short-term, I do think that housing conditions are softening. In terms of pricing, you will see soft growth at best and you could even see flat conditions,” Deda told SmartCompany.
However, over the medium- to long-term – the timeframe in which the hotspots selected by RP Data are supposed to be viewed – Deda is more comfortable with the outlook.
Like many economists, she says relatively strong population growth and relatively low levels of new home construction should help to put a floor under the market.
However, she cautions that home buyers and investors will need to step up their research efforts in the coming years to ensure that they are spotting value.
“What you’ve got to remember is that we often view the housing market as one market, but really the housing market is a number of markets,” she says.
“Even in a suburb, houses on one street can differ from houses on another street.”
The hotpots have been selected on a range of factors, including proximity to transport and retail amenities and the potential for renovation of properties in a suburb.
Another key factor was finding suburbs with attractive pricing – prices may have risen by less than the average for that area, or may be lower than similar suburbs in other area.
“When we look at the pricing of nearby suburbs, or suburbs with a similar proximity to Sydney these suburbs seem to have been overlooked or undervalued,” Deda says
“It might be surprising that some of these suburbs have been overlooked, particularly when you consider the growth that some of the nearby suburbs have witnesses.”
Arncliffe – Houses
Eastlakes – Units
Newtown – Units
Potts Point – Units
Sydenham – Houses
Braybrook – Houses
Carlton – Units
Heidelberg West – Houses
Kingsville – Units
Travancore – Units
Arana Hills – Houses
Greenslopes – Units
Holland Park – Houses
Salisbury – Houses
Windsor – Units
Dulwich – Units
Thebarton – Houses
Mirrabooka – Houses
West Leederville – Units
Tiwi – Houses
Braddon – Units
New Town – Units
Newcastle, NSW – Houses
Gladstone, Queensland – Houses
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
