Whether you are looking to buy a home to live in or as an investment, some suburbs represent better value than others when it comes to long-term capital growth and rental yields. Suburbs that outperform others are typically situated in areas where amenities and transport are high, where new development is occurring, and stable employment opportunities exist. Let’s look at what cities and regional areas are expected to perform well during 2015.
Best Cities for Home Buying
According to more than 300 real estate agents and property developers, Brisbane is anticipated to reach a capital growth of 5.7 percent in home prices during 2015. Sydney will reach an estimated 4.1 percent growth, and Melbourne 2.7 percent. Adelaide is expected to reach 2.1 percent and Perth 1.8 percent. Overall, there are signs that the residential market is beginning to cool with house prices in city areas expected to drop by approximately 4 percent over the next 12 months. This is based on current economic factors such as higher unemployment rates, a lack of household income growth, reduced housing affordability, and higher household debt levels, as well as added cost of living pressures.
Best City Suburbs for Home Buying
Experts predict that the following suburbs are ones to watch during 2015:
New South Wales – Eastwood, Glebe, Manly, Marrickville, Newton, Oran Park, Penrith, Ryde, Surry Hills, and the Sydney CBD.
Queensland – Brisbane, Gold Coast, Toowoomba, and the West End.
South Australia – Mile End, Norwood and Parkside.
Western Australia – Baldivis, Belmont, Bentley, Mandurah, Perth and Subiaco.
Victoria – Essendon, Glen Iris and Ringwood.
Best Predicted Regional Areas for Home Buying
Regional areas typically have higher rental yield than capital growth, but many areas that are well established have strong populations and affordable housing, which make for sound investment. The predicted top performing regional areas are as follows:
Broken Hill(New South Wales) – A mining town situated in New South Wales, near the South Australian border, Broken Hill’s median home price is approximately $160,000. While property prices have fallen in this region and capital growth is expected to stagnate, rental yields are high and hover around 11 percent.
Cowra (New South Wales) – Situated approximately 300 km south west of Sydney, this town has boutique vineyards and is a well known tourist destination. The median home value here is $197,000 with a 7 percent rental yield.
Deniliquin – Murray (New South Wales) – This agricultural town has a median home price of $197,000 and a 7 percent rental yield.
Morwell – Gippsland(Victoria) – A small rural, coal mining town situated in Victoria. Home prices here are around $175,000 and rental yields are approximately 6 percent.
Moe – La Trobe(Victoria) – Another gold mining town, where electricity generation, agricultural production and dairy, as well as cultural and sporting events provide employment for residence. This town has a young population and median home prices are approximately $189,000 with rental yields sitting at 6.6 percent.
Naracoorte (South Australia) – Situated in the Lucindale region, Naracoorte is a farming town that attracts tourist due to its popular national park. Median home prices here are approximately $211,000 with a 5.8 percent rental yield.
Stawell – Wimmera (Victoria) – A gold mining town that still mines, median home prices here are around $178,000 with a gross rental yield of 7 percent.
Best Suburbs By State for Unit Buying
Units are popular with older people wishing to downsize, young people wanting smaller, compact living and single parents. The best units are those with a courtyard as people like a little outdoor space. The following suburbs are expected to be the best for unit buying in 2015:
|State||Suburb||No. Rooms||Rental Yield %||Median $|
|New South Wales||Penrith||1||13.2||295,000|
|South Australia||North Adelaide||1||4.6||327,500|
|Northern Territory||The Gap||2||3.4||342,000|
Best Regional Areas for Unit Buying
If you’re looking for a more affordable property option, then look outside the major cities. According to property experts the best areas to buy in are:
Victoria – Bendigo and Geelong where the annual growth is between 7.7 and 8.5 percent for 2 bedroom units.
Queensland – Toowoomba where two bedroom units have an annual growth rate of 5.7 percent.
Are you looking to buy a home or unit? Then contact eChoice we can help you find the right home loan today.
Written by eChoice
Since 1998, eChoice has helped more than 50,000 Australians secure a home loan through its network of over 25 lenders and hundreds of loans. Best of all our service is cost and obligation free!