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Why you should look to the prestige market for bigger returns

By Staff Reporter
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Investors avoiding expensive properties in favour of lower-priced investments may not see across the board success with this approach, according to RP Data.

A new RP Data Blog has noted that while the trends across price segments frequently see expensive housing underperforming, this isn’t equal across markets.

Across the combined capital cities, the blog notes, “the most expensive 20 per cent of suburbs have seen values fall by -8.5 per cent since the market peak compared with a -4.0 per cent fall across the most affordable twenty percent of suburbs and a -4.4 per cent fall across the broad middle 60 per cent of suburbs.”

However, while this may be true for the national statistics, when investors are looking on a city-specific basis, this trend can be the complete opposite.

“Brisbane and Adelaide are showing the opposite performance, with the more expensive price segments of the market returning a better result for dwelling values compared with the more affordable priced suburbs,” RP Data’s Tim Lawless notes.

“The weaker performance in these markets can be linked with mortgage repayment pressures being felt across the mortgage belts of both these cities, particularly in South East Queensland where many of the most affordable suburbs in the region have shown a higher than average level of mortgage arrears.”

Brisbane and Adelaide are currently the most affordable capitals in the country.  

This new information is yet another reason why investors must look past national trends and statistics and do their research thoroughly.

“[Investors] should be looking at the dynamic of the housing market from a localised perspective ensuring they are in tune with market conditions at both the macro and micro level,” wrote Mr Lawless.

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Highest annual price growth - click a suburb below to view full profile data:
1.
FAIRLIGHT 46.02%
2.
CASUARINA 44.36%
3.
THE ENTRANCE NORTH 41.09%
4.
ULTIMO 40.67%
5.
LAVENDER BAY 40.2%