15 capital city hotspots primed for capital growth past 2018

According to Jeremy Sheppard, LocationScore director of research, investors have the best chances of finding high-growth and affordable property in Melbourne’s Baxter, Brisbane’s Ferny Hills and Adelaide’s Birkenhead.

“Just over half the suburbs on our list are priced below $550,000, which is very price-accessible for most capital city buyers,” the research director said.

Despite Melbourne’s domination of the top three places, Mr Sheppard also recommended to not take Adelaide for granted, which took out fourth, fifth and sixth on the list.

“One of the more interesting outcomes from our research is that Adelaide locations are seeing some of the strongest results in our demand versus supply study; its suburbs came in just behind Melbourne,” the director claimed.

“Combined with its relative affordability, Adelaide is a city that could yield excellent outcomes for savvy investors.”

The 15 suburbs are as follows:

Melbourne

Topping the list for Melbourne and the top 15 suburbs overall was Baxter, which LocationScore claimed had the strongest demand versus limited supply due to limited vendor discounting, auction clearance rates of over 80 per cent and online search interest reaching over 220 views per listing.

“Baxter houses are obviously an eagerly sought-after commodity,” Mr Sheppard said.

“It’s a small suburb with limited stock and median house price of $534,000, making it a great choice for investors looking to narrow their research.

“Best of all, it has lifestyle, with easy access to the Port Phillip Bay foreshore and excellent facilities in adjacent suburbs.”

Adelaide

Coming in as the second best-performing capital city, Adelaide has overall affordability that is a big pull, according to LocationScore.

Placing fourth overall, Adelaide’s best-performing suburb of Birkenhead is experiencing strong online interest, tight stock, minimal price discounting and low vacancy rates, all the while being located 13 kilometres from the CBD and situated on the banks of the Port Adelaide River.

“Our research shows Birkenhead to be well worth a deep dive for investors, but they’ll need to move fast — there’s is strong demand and probably not enough stock available to give them time to be choosy,” Mr Sheppard said.

Brisbane

Following Melbourne and Adelaide, Brisbane came in third place for states, with suburbs in the north of the middle and outer rings seeing modest success.

Ferny Hills was the most viable investment option for Brisbane, according to the research, with a notably high search interest of nearly 200 hits per listings.

“Ferny Hills is offering an excellent option for those looking to shortlist locations for their next Brisbane purchase,” Mr Sheppard said.

“Housing has a median price of just $546,000, with good-quality family houses on decent-sized suburban blocks surrounded by desirable shopping and lifestyle facilities as well as easy access to the train station at Ferny Grove.”

Sydney

Ranking in at fourth for capital cities, Sydney has property that may not necessarily be affordable, but high levels of demand still make investing in the New South Wales capital a smart decision.

“Sydney housing always garners demand and our analysis shows there are still plenty of locations where buyer numbers are rising while supply tightens,” Mr Sheppard said.

Despite recording a median house price of $1.5 million, LocationScore data indicates that there is still more room for the price to grow.

“With frontage to Narabeen Lakes and easy access to popular beaches such as Dee Why, this suburb provides a highly attractive lifestyle with comprehensive services and facilities,” Mr Sheppard said.

“We are seeing more and more buyers looking at property in Cromer online, and vendors are hardly needing to discount their asking prices in order to sell.

“It certainly bodes well for house prices in the near future.”

Perth

Trailing behind the other capital cities, Perth has houses that are still viable investment opportunities, with the market paving the way for relatively cheap property available, with Bibra Lake standing out as the best option in the capital city area.

“Positioned 18 kilometres south of the CBD, it provides housing with a median just over $500,000, all within a short drive to popular Fremantle,” Mr Sheppard said.

“The research shows sellers are in no panic and buyers are making decent offers.

“This is a healthy market for investors because demand is ahead of supply, but not alarmingly.”

The research stems from LocationScore’s index system that ranks suburbs out of 100 based on supply and demand, with the index including several metrics such as days on market, vacancy rates, vendor discounting, rental yields, auction clearance rates, percentage of stock on the market, percentages of renters to owner-occupiers and online search interest.

Suburbs with a score above 62 are considered good, while those above 77 are considered excellent.

“Rocketing demand relative to supply is an excellent gateway indication of a suburb’s potential for real estate price growth,” Mr Sheppard said.

“By unearthing hot demand growth zones, investors can narrow down the search area when looking for their next investment.”