Price per square metre a crucial tool for any investor
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Price per square metre a crucial tool for any investor

By Sasha Karen

When trying to determine where to purchase an investment property, one researcher states that looking at price per square metre is the best tool in any investor’s pocket, better than relying on median dwelling prices.

Trying to determine where property is most affordable is commonly done so through looking at the median price of a suburb, but according to RiskWise Property Review CEO Doron Peleg, looking at price per square metre reveals the “true” value of a property.

“[Price per square metre] is a very effective tool to identify opportunities and anomalies in the market, helping investors to better assess the risks associated with suburbs and individual properties (particularly units),” Mr Peleg said.

Firstly, Mr Peleg says to identify areas with a high price per square metre, as his research dictates these locations have a lower level risk and should deliver a stronger capital growth in the long-term, especially for houses.

Next, suburbs within those areas with low price per square metre compared to neighbouring suburbs need to be identified, which Mr Peleg says risk is reduced and increases the chance for solid capital growth.

“Investors who successfully identified such opportunities five years ago, today own [properties] that have significantly outperformed the market,” Mr Peleg said.

“A prime example is a unit in Freshwater; with a price per square metre of $7,516, it was significantly cheaper than the nearby Curl Curl, with a price per square metre of $10,000.

“As a result, property prices in Freshwater have increased by 63.5 per cent in comparison to 47.5 per cent in Curl Curl.”

The methodology has also revealed a number of “animalities” in the current market. Mr Peleg provides the example of Glebe and AnnandaleAnnandale, NSW Annandale, QLD, which has median unit prices of $808,000 and $875,000, a difference in price of 7.5 per cent.

“However, the price per square meter in Glebe is only $9,280, where the price in Annandale is $12,873 – effectively a 38 per cent price difference,” Mr Peleg said.

Another example given by Mr Peleg is Rose BayRose Bay, NSW Rose Bay, TAS, as its median unit price of $1,065,000 is on a par to that of Dover Heights and North Bondi, yet the price per square metre in Rose Bay is $11,100, while Dover Heights and North Bondi have prices per square metre of over $13,000, a difference of at least 17 per cent.

One of the riskiest suburbs to consider, price per square metre and otherwise.

Zetland has a very large number of units in the pipeline, and moreover, the price per square metre is $11,658 – very expensive, especially when you consider it is around 10 per cent more expensive than the affluent suburb of Double Bay,” warns Mr Peleg.

Data presented exclusively for Smart Property Investment reveals the top 10 most expensive and most affordable suburbs across Australia for both units and houses:

Units – Top 10 most expensive

State Suburb Median  Price per SQM
NSW BARANGAROO $2,901,772 21,264
NSW DAWES POINT $3,524,007 21,417
NSW MILLERS POINT $1,692,669 15,370
NSW BONDI BEACH $1,064,880 14,772
NSW TAMARAMA $1,438,778 17,224
NSW DARLING POINT $2,136,315 16,044
NSW POINT PIPER $2,792,995 16,843
NSW BALMAIN EAST  $1,501,841 16,045
NSW BELROSE $1,005,484 29,573
NSW BURRANEER $1,214,742 17,416

Units – Expensive suburbs outside of NSW

State Suburb Median  Price per SQM
VIC EAST MELBOURNE $636,524 8,528
VIC FITZROY $771,095 9,481
VIC ALBERT PARK $668,510 8,739 
VIC MIDDLE PARK $771,375 9,523
QLD BRISBANE CITY $485,144 5,397
QLD DUTTON PARK $497,876 7,365
QLD TENNYSON $1,107,828 5,961
WA SWANBOURNE $842,311 9,285
WA COTTESLOE $773,591 9,133
WA FLOREAT $847,281 8,065

Units – Top 10 most expensive

State Suburb Median Price per SQM
NSW CHIPPENDALE $1,509,531 12,793
NSW DARLINGTON $1,518,696 13,504
NSW PYRMONT $1,284,842 13,321
NSW DARLINGHURST $1,962,951 16,408
NSW SURRY HILLS $1,726,803 15,328
NSW WOOLLOOMOOLOO $1,387,798 12,213
NSW PADDINGTON $2,291,087 16,930
NSW TAMARAMA $4,031,327 13,507
NSW MCMAHONS POINT $3,204,002 15,327
NSW WOOLWICH $5,970,325 12,237

Units – Expensive suburbs outside of NSW

State Suburb Median Price per SQM
VIC BURNLEY $1,539,012 7,080
VIC ST KILDA WEST $2,101,602 6,597
VIC ALBERT PARK $2,044,262 10,116
VIC MIDDLE PARK $2,545,182 11,185
QLD PETRIE TERRACE $831,390 3,093
QLD SPRING HILL $943,009 3,002
QLD TENERIFFE $1,590,590 3,342
WA WEST PERTH $699,780 3,678
WA SUBIACO $1,200,114 3,472
WA COTTESLOE $1,829,331 3,433

Houses – Most affordable located within 20 kilometres from a CBD

State Suburb Median  Price per SQM
NSW ROSEHILL $807,938 1,340
NSW SOUTH GRANVILLE $889,440  1,304
NSW BIRRONG $837,858  1,413
NSW GUILDFORD $846,997  1,413
NSW VILLAWOOD $770,367  1,275
NSW KURNELL $1,043,887  1,385
VIC BROADMEADOWS $431,002 702
VIC DALLAS $354,453  600
VIC COOLAROO  $353,113  626
VIC MEADOW HEIGHTS  $403,976  717
VIC CAMPBELLFIELD $411,481  701
QLD ARCHERFIELD $362,218  88
QLD MOGGILL $536,667  448
QLD ACACIA RIDGE $389,316 521
QLD WOODRIDGE $301,340 456
QLD GAILES $261,650 393
WA BOYA $588,530 209
WA GREENMOUNT $478,725 320
WA GOOSEBERRY HILL $676,451 330
WA LESMURDIE $604,403 372
WA MARTIN $472,646 195
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Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BERKELEY VALE 46.03%
2.
MANGERTON 44.65%
3.
MOAMA 43.59%
4.
NORTH NARRABEEN 42.08%
5.
WAUCHOPE 40.74%
Price per square metre a crucial tool for any investor
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