Where to buy high-growth properties for less than $200,000

In a time when it is deemed harder to enter the Australian property market due to rising prices, particularly in capital cities, certain suburbs offer investors an affordable entry to the market as well as a good potential for capital growth. Find out where these areas are:

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As of July 2018, the median prices across capital cities sit between $800,000 to $425,000, with Sydney being the most expensive area to invest in and Hobart being the least expensive. However, this does not mean that anyone without $400,000 to spare or borrow cannot enter the property market.

On the contrary, affordable properties have been on the rise across Australia, with the most affordable 10 per cent seeing values go up while the most expensive 10 per cent are seeing values go down.

According to CoreLogic’s Cameron Kusher: “Overwhelmingly, the data shows long-term values at the more affordable end of the housing market increased at a faster pace than the most expensive properties.”

“It also highlights that when there is a housing market downturn, lower-valued properties typically experience much more moderate declines than the higher valued housing stock,” he added.


Additionally, wealth-creation opportunities are not confined to the capital cities anymore.

The $400,000 to $800,000 you spend on a single property in the big cities can be used to buy two or more affordable properties in locations with a significant upside growth potential and rental returns that generate positive cash flow.

This affordability coupled with improving employment opportunities and growth drivers make regional locations ideal for investment.

In fact, by assessing the total return of capital gains plus rental income over the long-term, a good number of affordable suburbs outperformed the capital city markets in the last three years.

Propertyology’s Simon Pressley said: “Affordable property is available in every state and territory, so there is no need to buy property in locations that are past the peak of the latest cycle and will burden you with significant out-of-pocket expenses.”

Here are six affordable suburbs with real estate assets that offer good potential for growth:

1. Miena, Tasmania: $171,000

Miena is a small lakeside town located in Tasmania’s central highlands, 132km north of Hobart. It is home to the Great Lake, Australia second largest freshwater lake.

In the past quarter, Miena has seen a 6.54 per cent gain in median home prices.

For the past year, the suburb’s capital gain sits at 23.24 per cent, which is higher than its 8.23 per cent growth within a five-year period.

Over a ten-year period, the suburb also saw a 7.7 per cent growth.

As of July 2018, it ranks 172nd in Tasmania in terms of estimated capital gains experienced by investors over the last three years and 692nd in Smart Property Investment’s list of suburbs to look into.

2. Peak Hill, NSW: $135,000

Peak Hill is a town located in Parkes Shire in the Central West of NSW, 409km west of NSW capital Sydney.

The suburb enjoyed a 39.9 per cent capital gains over the last 12 months.

Over a ten-year period, it saw an 11.77 per cent growth, joining the ranks of the best performing suburbs in NSW.

According to Smart Property Investment, with the median price at $135,000 and the average rent at $220, investors may earn more than 8 per cent in gross rental yield.

3. Yarraman, Queensland: $195,000

Yarraman is located 181km northwest of the Queensland capital Brisbane, on the junction of the New England and D’Aguilar highways. Its fertile valley produces timber, grain and beef and dairy goods.

Residents also enjoy the Yarraman Library and Post Office, as well as the Yarraman Memorial Pool.

In the past 12 months, the suburbs saw a 30.01 per cent increase in median dwelling price, making it one of the best performing suburbs in Queensland.

Over the past five years, investors enjoyed a 23.03 per cent capital gains following a steady rise in median dwelling price.

As of July 2018, Yarraman ranks 772nd in Smart Property Investment’s list of best yielding suburbs in Queensland.

4. Clarendon Vale, Tasmania: $185,000

Clarendon Vale is among the suburbs of TAS capital Hobart, within the local government area of the City of Clarence.

The suburb saw a 26.28 per cent increase in the median property prices over the past year, making it one of the best performing suburbs in Tasmania.

In the past quarter, it ranked 18th across Australia in Smart Property Investment’s list of best suburbs based on median property value growth.

Data form Smart Property Investment also identifies Clarendon Vale as one of the best yielding suburbs for rental properties in Tasmania, with an average return of more than 7 per cent.

5. Walgett, NSW: $142,500

Walgett is located in northern NSW, 691km northwest of NSW capital Sydney. It is a regional hub for the wool, wheat and cotton industries.

The 31.03 per cent increase that the suburb experienced over the past 12 months made it one of the best performing suburbs in NSW.

It also ranks 1,372th on Smart Property Investment’s list of best yielding suburbs for rental properties in NSW.

Meanwhile, Walgett ranks 1,174th on the list of highest median property value growth across Australia over the quarter.

6. Ararat, Victoria: $190,000

Ararat is a city in south-west Victoria, 198km west of the VIC capital Melbourne. It is the largest settlement and the administrative centre in the Rural City of Ararat.

The city’s economy is largely driven by wool, beef and the Grampians Wine Region, the primary industries in the region. It also boasts wind farms that produce large amounts of renewable energy as well as Australia’s largest manufacturers of farm machinery and wood heating.

Some of its popular attractions are the Gum San Chinese Heritage Centre, Aradale Lunatic Asylum Tours, J Ward and the Langi Morgala Museum.

Ararat obtained a 2.15 per cent growth over a ten-year period and a 15.15 per cent growth within a five-year period.

With the average rent sitting at $250, investors have the potential to enjoy a 6.84 per cent increase in gross rental yield.

Check out Smart Property Investment’s Best Suburbs page to know more about the highest yield, fastest growing and highest growth suburbs across Australian states and territories.

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