The top 20 affordable locations tipped to experience rapid value increases have been uncovered by a new report.
As seen in SPI Online's e-newsletter WHICH Investment Property on 10 May 2016.
Download FULL Hotspotcentral report to make sense of the data behind this report.
Hotspotcentral.com.au has identified the 10 suburbs with values below $300,000 and the 10 suburbs with values between $300,000 and $500,000 across the country that are likely to soar in value as the balance between supply and demand begins to shift.
The predictions are based on an algorithm that takes into account eight capital growth indicators – including online search interest, reducing number of days on market, an increase in auctions and growing rental yields.
“Many investors just don’t have the time or expertise to find and analyse the supply and demand indicators for every Australian suburb (and there are over 15,000 of them), across multiple data sources, in order to cherry pick the best areas for capital growth potential,” the report said.
Based on the eight capital growth statistics, the property markets have been given a Demand to Supply Ratio (DSR) ‘BoomScore’ – “a single numerical measure (between 0 and 48) indicating a suburb’s likelihood to achieve future capital growth, i.e. to be a good investment”.
Topping the $300,000 to $500,000 price bracket list based on statistics for April 2016 was the Sydney suburb of Plumpton (units). Hotspotcentral said typical values for units were $456,324 and the suburb had a DSR score of 40 – indicating buyers “need to move quickly”.
“There is strong demand from buyers yet not enough properties to give them time to be choosey. Sellers don’t have long to wait before they receive a healthy offer.
Prices are being driven upward. Expect good growth in the immediate future,” the report said.
Units in Queensland’s Burleigh Waters, which placed ninth on the same list with a DSR score of 37, achieves a “good mix between capital growth potential and gross rental yield (5.85 per cent, which compares well to the Queensland average of around 4 per cent)”, according to the report.
“The rental market is very tight with vacancy rates of only 0.5 per cent due to supply constraints in the area.
“The good yields and low vacancy rates make this area attractive to landlords. Median prices have already jumped by 8.68 per cent in the last 12 months.”
The report indicated there were many reasons for Burleigh Waters’ imminent rise.
“With the Commonwealth Games 2018 around the corner, and Chinese tourism having jumped in the area, it is expected prices will further increase as local and foreign investment moves away from the more expensive Sydney and Melbourne property markets,” it said.
The full list of suburbs can be seen below:
Top 10 locations with properties under $300,000
| State | Postcode | Property type | Suburb | DSR Score | Typical value |
| Tas | 7018 | H | Warrane | 36 | $235,507 |
| NSW | 2790 | H | Hampton | 35 | $260,000 |
| NSW | 2261 | U | Berkeley Vale | 35 | $209,605 |
| SA | 5084 | U | Kilburn | 34 | $184,000 |
| Vic | 3631 | U | Kialla | 33 | $187,000 |
| Tas | 7010 | H | Goodwood | 33 | $222,142 |
| Qld | 4114 | U | Woodridge | 33 | $190,972 |
| Vic | 3505 | H | Merbein | 32 | $182,051 |
| Qld | 4127 | U | Slacks Creek | 32 | $212,493 |
| Tas | 7016 | H | Risdon Vale | 31 | $170,507 |
Top 10 locations with properties between $300,000 and $500,000
| State | Postcode | Property type | Suburb | DSR Score | Typical value |
| NSW | 2761 | U | Plumpton | 40 | $456,324 |
| Qld | 4214 | U | Arundel | 38 | $312,945 |
| NSW | 2528 | H | Warilla | 38 | $407,437 |
| NSW | 2530 | H | Koonawarra | 38 | $392,543 |
| Qld | 4223 | U | Currumbin Waters | 38 | $357,798 |
| NSW | 2535 | U | Coolangatta | 37 | $304,561 |
| Tas | 7018 | H | Howrah | 37 | $364,113 |
| Qld | 4054 | H | Arana Hills | 37 | $471,609 |
| Qld | 4220 | U | Burleigh Waters | 37 | $372,987 |
| NSW | 2176 | U | Wakeley | 37 | $415,090 |