Where are the hottest suburbs around Australia?

Jeremy Sheppard, LocationScore’s director of research, said that high demand in relation to supply is a vital measure of a suburb’s potential for price growth.

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

“The trick is to track all the factors that drive the demand/supply curve in a suburb. When demand is ramping up faster in one location compared to others, it’s time to pay attention.”

LocationScore’s scoring system, which looks at eight different factors of days on market, vacancy rates, vendor discounts, rental yields, auction clearance rates, percentage of stock on the market, percentages of renters to owner-occupiers and online search interest, gives a suburb a rating out of 100, with scores above 77 rating as excellent and between 77 to 63 as good.

According to LocationScore, the top five suburbs in the most popular markets are:

Sydney

The most in-demand Sydney suburbs were all located in the south-west, which Mr Sheppard claimed was due to buyers seeking affordable options away from the CBD.

Units in Condell Park proved to be the most in-demand suburb, situated 20 kilometres away from the Sydney CBD, with a particular rising interest in the online space.

“Even in Sydney’s pricey market, you can find units in Condell Park available at a median of approximately $530,000,” Mr Shepard said.

Also sought after online were units in Oatley and Caringbah South coming in at 74 and 72, and these areas, in addition to houses in Kareela ranking at 83, were said to be garnering popularity with buyers looking for locations near water at reasonable prices.

“While these suburbs remain reasonably pricey, other locations closer to the CBD with similarly easy water access have substantially higher buy-in prices,” said Mr Sheppard.

Melbourne

Four out of five in-demand suburbs were located north of the CBD, with houses in Coolaroo, 20 kilometres north of the city, the most in-demand, ranking in at a 79.

“The relative demand for houses is growing, and with a median price around $470,000, it’s easy to see why buyers are looking carefully at Coolaroo,” Mr Sheppard said.

South Morang, ranking in at a 79, was the most in demand suburb for units due to rising auction clearance rates.

Heidelberg in the city's west was also on the radar of buyers with Art Deco architecture and nearby retail businesses big draws, according to Mr Sheppard.

“Residents are well-serviced in Heidelberg and it’s an easy commute to town via the train,” he said.

“Elsternwick has already garnered a reasonable amount of buyer interest as a rising star of the Melbourne property market with gentrification well and truly set in.”

Brisbane

Mr Sheppard predicted 2018 could see a rise of overall investor activity in Brisbane due to softening activity in Sydney, with demand most notable in middle-ring suburbs.

“Although Brisbane is a relatively affordable capital compared to Melbourne and Sydney, its inner-city market performed well last year,” he said.

“As a result, buyers looking for reasonably priced property are considering their options beyond the 10-kilometre radius of the CBD.”

Units in Alexandra Hills topped the list of demand with Mr Sheppard stating the facilitates in the area are a big draw.

“There’s plenty to enjoy in the Redland Bay area, and with townhouses and villas priced between $250,000 and $350,000, lifestyle owners are looking to Alexandra Hills,” he said.

Adelaide 

Like Brisbane, Mr Sheppard sees a rise in investor interest in Adelaide this year with investors looking away from Sydney.

Houses in Ethelton, Aldagate and Magill all saw a boost in online searches, according to LocationScore data.

“Magill is just seven kilometres east of the city centre and has comprehensive retail and educational facilities,” Mr Sheppard said.

“Houses are very appealing with prices around the mid-$500,000s – some are even selling below the half-million mark.

“Not only are buyers keen to be just seven kilometres from town, this is a waterfront address that has all the lifestyle benefits that go along with being near the shoreline.”

Houses in Gawler East were also highly sought-after, which Mr Sheppards claims contains very affordable housing for those who do not mind travelling 35 kilometres to the city.

“The attractive element for Gawler East is that vendors are discounting their asking prices,” he said.

“As vendors become more realistic about their pricing, buyers see an opportunity to get in.”

Hobart

Hobart’s success in 2017 has been well-known, with the east coast in particular finding a lot of demand, according to LocationScore.

“Hobart had been producing good rental yields at attractive buy-in prices for the past few years, but it came into its own in 2017 with the city outperforming the major capitals on total returns and becoming a hot ticket for investors,” Mr Sheppard said.

Of note is Austins Ferry, which Mr Sheppard described as having an “idyllic outlook and easy access to town for commuters”, with many housing prices available from $300,000 to $350,000.

“Austins Ferry was in high demand last year with a spike in online search interest,” he said.

“Its retail strip, desirable schooling and accessibility all helped drive relative demand.”

Only 5 kilometres away from the CBD, West Moonah was another highly in-demand suburb.

“Great schools, easy access, comprehensive parklands and an engaged community are all helping drive buyers to West Moonah housing,” Mr Sheppard said.

Canberra

Canberra was another well-performing capital city over the last year, with Mr Sheppard noting a strong interest in units, with four out of five highly demanding suburbs registering interest in units.

“Interestingly, relative demand rose most quickly in the unit sector across Canberra,” Mr Sheppard said.

City fringe suburbs also saw increased interest, like Ngunnawal and Banks, where Mr Sheppard said: “both suburbs saw buyer demand heat up with tighter vacancy rates and lower percentage of stock on market”.