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Articles usually cover the top property investment areas, but what about those that are underperforming? Here are some suburbs that research has urged investors to avoid in three of Australia’s capitals.
This article originally appeared on Broker Daily.
Positive return on investment is what determines an effective investment property. Recent data from LongView has analysed suburbs across Sydney, Melbourne and Brisbane, determining which areas offer slim to no capital growth rates.
The 10 worst investment suburbs across metro Sydney, determined through historical rate of capital growth, were:
Sydney Olympic Park (0 per cent)
Rosehill (0.21 per cent)
Mortlake (0.72 per cent)
Asquith (1.18 per cent)
Parramatta (1.57 per cent)
Chippendale (1.68 per cent)
Harris Park (1.69 per cent)
Westmead (1.74 per cent)
Wentworth Point (1.75 per cent)
Warwick Farm (1.75 per cent)
For Melbourne’s metro, the top 10 were:
Essendon North (-0.56 per cent)
Abbotsford (0 per cent)
Travancore (0.11 per cent)
West Melbourne (0.54 per cent)
Maribyrnong (0.56 per cent)
South Yarra (0.59 per cent)
South Melbourne (0.74 per cent)
St Kilda (0.91 per cent)
Collingwood (1.11 per cent)
Docklands (1.20 per cent)
For metro Brisbane:
Fortitude Valley (1.55 per cent)
Brisbane City (2.19 per cent)
South Brisbane (2.26 per cent)
Bowen Hills (2.43 per cent)
Woolloongabba (2.93 per cent)
Milton (3.16 per cent)
Spring Hill (3.29 per cent)
Newstead (3.29 per cent)
Albion (3.35 per cent)
Kelvin Grove (3.36 per cent)
Co-founder and executive chair of LongView, Evan Thornley, provided a guide for determining an attractive investment.
“Investors don’t realise that the ‘right’ properties are those where most of the value is held in the land underneath the home, and the best properties for capital growth are RODWELLs – robust, older dwellings on well-located land. Those located in Sydney, Melbourne and Brisbane make up just one-sixth of all properties in Australia, yet they account for nearly half of all capital growth,” Thornley said.
“Our analysis shows that the five worst performing suburbs for capital growth across Australia have one thing in common. Nearly 80 per cent of the sales of investment properties in 2024 were apartments or units, not Houses. This confirms LongView’s golden rule – land appreciates, buildings depreciate.
“Most people see better returns on the family home they bought for lifestyle reasons than on the investment property they thought they were buying to make money. This Fund allows investors to achieve the same outcomes, but on a much larger scale.”
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