First home buyers are being advised to balance their desire to live in a popular area versus the long term value of their new home, according to new data.
Onthehouse.com.au have looked at the generational gap in home ownership by comparing the best performing suburbs over the past three decades with predictions of long term future growth.
The findings have revealed that outer suburbs tend to grow faster than inner city areas, potentially offering greater returns for buyers.
Kellyville Ridge in Sydney, Mickelham in Melbourne and Heathwood in Brisbane were the top suburbs to buy in 1980. Homeowners who bought there in 1980 have seen their property values grow 678 per cent, 647 per cent and 1900 per cent respectively.
Spokesperson for Onthehouse.com.au John Edwards said, “We’ve all heard anecdotal evidence of people who bought cheap in the 1980’s and are now sitting on huge returns, and this data shows that those who were prepared to invest in less popular areas with good growth potential back in the 80’s and 90’s would indeed have been handsomely rewarded.
“As Gen Y start to enter the property market over the next few years, they will also need to balance their desire to live in a ‘popular’ area versus the long term value of their new home.”
In order to find suburbs that would offer a similar proposition to first-time buyers when it came to long-term growth, onthehouse.com.au selected the top suburbs based on Residex’s eight year prediction model.
The data was adjusted to focus on properties valued under $500,000, to make it more relevant for first-time buyers.
The future predictions revealed that Sydney’s western suburbs, Melbourne’s south east and suburbs in Brisbane’s south, far north and east stood out in terms of growth potential.
Yellow Rock in Sydney, Skenes Creek in Melbourne and Munruben in Brisbane topped the prediction models.
“Today’s bargain suburbs could deliver great results for homeowners in the long term,” said Mr Edwards.
“Of course there will be variations depending on property itself and its location, but overall we believe these suburbs could be the future hidden gems.
“It’s really important that any first-time buyers do extensive research before making that commitment.”