A new report has uncovered an extensive list of inner city suburbs where units can still be purchased for less than $300,000, defying the common perception that buyers are priced out of Australia’s capital city property markets.
The inaugural Inner City Steals report from Real Estate Business’ sister title Smart Property Investment has identified 20 Australian suburbs within five kilometres of the nation’s capital city CBDs where investors can still pick up property for under $300,000.
According to the report the inner heart of Perth has emerged as the hottest capital city investment location, with the top four suburbs on the list all located in the WA capital – Highgate, Mount Lawley, North Perth and West Leederville.
The real estate experts who collaborated with Smart Property Investment to formulate the report also unanimously affirmed Perth as the top metro investment choice for 2012.
“All the forward indicators have WA really breaking out of its trough,” said Inner City Steals panelist Dr Andrew Wilson, senior economist with Australian Property Monitors (APM).
“In the first two months of this year, dwelling loan approvals were 32 per cent higher in WA than in the first two months of last year. That is an enormous lift,” he said.
Alongside Dr Wilson, the report’s panellists also included Cameron Kusher, senior research analyst at RP Data, and Louis Christopher, founder of SQM Research, all representatives of the nation’s foremost property data companies and collectively three of the most respected minds in Australian real estate.
The Inner City Steals list was compiled by identifying suburbs within five kilometres of the CBDs in which one in four units still sells for $300,000 or less. In other words, the ‘25th percentile price’ was $300,000 or less. (The report concentrated only on units, rather than houses.)
Simply looking at data, however, has its limitations. With this in mind Smart Property Investment asked its expert panel to rank the suburbs according to their potential for capital growth based on a variety of macro and micro indicators.
The panel first ranked the suburbs according to the broader capital city prospects, followed by the individual suburbs’ own specific market outlook.
Perth took out the experts’ top pick, followed by Sydney, Adelaide, Melbourne and then Hobart.
Interestingly, Brisbane’s inner city suburbs did not fall within the parameters of the report, however had the 25th percentile price been $350,000 the expert panel agreed that the city would have outperformed Adelaide, Melbourne and Hobart.
According to the editor of Smart Property Investment Phillip Tarrant, the 2012 Inner City Steals report proves there are still affordable opportunities available in capital city centres for investors who know what to look for.
“Property markets close to the nation’s major CBDs have long been highly sought-after, not to mention some of the best performers in terms of capital growth,” he said.
“Increasing demand for inner city living and changing household demographics mean this property segment is set to remain in incredibly strong demand.
“Although property in these markets often has a high premium attached, the Inner City Steals report reveals that there are still properties within reach of most property buyers.”
In addition, Mr Tarrant said investors should remember to use property data as a guide, rather than gospel.
“Our report has highlighted the suburbs that have solid prospects for future growth however it is down to the investor to use this research as the starting point for their own due diligence.
“There are still considerable opportunities for investors to build significant wealth through smart investment in Australian residential property,” he said.
For the full 2012 Inner City Steals Report, you can pick up a copy of the June issue of Smart Property Investment, on newsstands now.
The 2012 Smart Property Investment Inner City Steals suburbs:
1. Highgate, WA
2. Mount Lawley, WA
3. North Perth, WA
4. West Leederville, WA
5. Ultimo, NSW
6. Mile End, SA
7. Goodwood, SA
8. Wayville, SA
9. Kent Town, SA
10. Ashford, SA
11. Keswick, SA
12. Rose Park, SA
13. North Melbourne, VIC
14. Carlton, VIC
15. Melbourne, VIC
16. New Town, TAS
17. North Hobart, TAS
18. West Hobart, TAS
19. Sandy Bay, TAS
20. South Hobart, TAS