While regional areas were the hot spots to buy this year, it’s the smaller capital cities that will shine in 2023 – offering the best bargain for house hunters, a new report has found.
The annual Rising Stars Report, Canstar’s Australian property market report powered by investor research firm Hotspotting, has singled out the markets poised for property price growth in 2023.
It identified 110 property locations around the country based on sales volumes, price growth, vacancy rates and rental growth, plus infrastructure spending and amenities.
Adelaide topped the leaderboard, with the best prospects for future capital growth, followed by Brisbane and Perth.
“All three markets have been strongly resistant to the downturn pressures and have benefited from the pursuit of affordability, which is the strongest theme pervading property markets across Australia in 2022,” said Hotspotting property expert and co-producer of the Rising Stars Report, Terry Ryder.
“Regional Queensland has dropped slightly from second to fourth but the outlook is still promising. As the nation’s leading recipient of population growth from internal migration, it continues to benefit from the exodus to affordable lifestyle trend.
“Places like Bundaberg South, Caloundra, Newtown and South Toowoomba made the list among others.”
For Adelaide, the suburbs that ranked highly included Christies Beach, Craigmore, Dover Gardens, Elizabeth Vale, Gilles Plains, Kurralta Park, Magill, Munno Para, Salisbury East and Seaford Meadows.
“Adelaide has been at the forefront of price growth nationwide for the past two years and continues to have one of Australia’s busiest and most competitive property markets, with homes selling quickly at higher-than-expected prices,” said Mr Ryder.
“It has been one of the markets most resistant to recent downturn price pressures and is now the top-ranked market in Australia, up from ninth last year. Previously regarded as a city that failed to deliver growth in its economy, population and property prices, Adelaide has been transformed by significant changes in its economy.
“It has claimed for itself the status as the high-tech innovation capital of Australia, with many national and international businesses based there. It also leads the nation in the alternative energy space and is a city of growing importance in the education and defence industries. “Buyers have targeted Adelaide for its relative affordability, higher-than-average yields and good growth prospects.”
Canstar’s editor-at-large, Effie Zahos, added the median house prices in the stand out suburbs in Adelaide are half of what you would typically pay for equivalent locations in Sydney or Melbourne.
Brisbane’s top 10 rising suburbs were apartments in Unnerley, Kangaroo Point and West Point, as well as houses in Caboolture, Dakabin, Deception Bay, Eagleby, Eastern Heights and Redbank Plains.
Meanwhile, Perth suburbs singled out for growth included Armadale, Baldivis, Brabham, Ellenbrook, Forestfield, Hocking, Joondalup, Orelia, Waikiki and Wellard.
The sharpest decline in the rankings for property market growth was in New South Wales, both in Sydney – which dropped from fourth to 12th – and in regional NSW, which fell from first to seventh, the report showed.
“This has coincided with a notable drop-off in the state’s economy. Sydney and many of the high-profile regional markets have become very expensive locations for housing in the recent boom and it is the top-end markets that have declined noticeably,” Mr Ryder said.
However, he said there will still pockets of growth available.
“Suburbs making the list in Sydney included Campsie, Fairfield, Georges Hall, Granville, Jamisontown, Liverpool, Lurnea, Marrickville, Rooty Hill and Westmead while regionally in the state it was places like Armidale, Dubbo, Glen Innes, Goulburn, Muswellbrook and more,” he added.
“Canberra, another very expensive city for housing, has dropped down the rankings from fifth to ninth. Top places here include Chisholm, Dickson, Franklin, Ngunnawal and O’Connor.”
Melbourne dropped two places compared to 2022 to second last in the rankings, with the areas identified as best to buy include Caroline Springs, Epping, Forest Hill, Glen Waverley, Hoppers Crossing, Melton South, North Melbourne, Richmond, Roxburgh Park and Sunbury, Mr Ryder revealed.
“In last place is regional Tasmania, which after a prolonged boom, the regional property market in the island state has passed its peak,” he noted.
“Top places in regional Tassie are Brighton, Devonport, Invermay, New Norfolk and Youngtown.”
Ms Zahos said further rate hikes were on the cards and being able to pay a mortgage will become a major stumbling block for buyers.
“Not only will they need to be able to service the headline rates but banks will be factoring in a 3 per cent buffer. The good news is that 81 suburbs out of the 110 Rising Star suburbs in Canstar’s 2023 report have a median price under $600,000 and a further 10 are between $600,000 and $700,000,” she said.
“If you factor in the possibility of another three 0.25 percentage point rate rises, the monthly repayments for a loan over 30 years on a $600,000 property with a 20 per cent deposit will be under $2900.”
While Australia’s property market is unlikely to see the skyrocketing prices it experienced over the past few years, the location of where people buy was still important, she added.
“Shopping for the perfect house in the perfect street won’t matter if you can’t afford the loan,” she said.
“Buyers must carefully consider their future plans and if they can still reasonably make repayments. Rising interest rates and living costs will be impacting affordability and the borrowing power of buyers. This could see more buyers locked out.
“If you can block out all the noise around whether or when house prices might fall and buy well based on location and affordability, property is still a great way to build wealth over the long term.”
Article source: Queensland Property Investor
Did you miss our previous article…