An expert is warning investors to avoid particular markets that are not poised to do well over the coming months due to sluggish sales activity and weak demand.
A study by Suburb Help identified 20 markets where inventory levels have been rising.
Inventory levels is a measure used to assess the activity in the market and refers to the amount of time it would take to sell all houses and units, assuming no properties are added to the market.
An upward trend in inventory levels means that properties are taking too long to sell, indicating a lack of interest from buyers.
Suburb Help chief property strategist Veronica Morgan said days-on-market are also on the high side in these suburbs.
“When you put those data points together, it suggests that prices in these locations will either grow slowly in the medium-term, or go backwards,” she said.
Top 20 suburbs for investors to avoid |
|||
Housing Markets |
Unit Markets |
||
|
Suburb |
Inventory level |
Suburb |
Inventory level |
|
Yarrawonga |
6.9 months |
Parramatta |
10.7 months |
|
Diggers Rest |
Above 12 months |
Sydney |
Above 12 months |
|
Girrawheen |
7.8 months |
East Perth |
9.9 months |
|
Yokine |
8.8 months |
Perth |
11.5 months |
|
Midland |
10.8 months |
Rouse Hill |
Above 12 months |
|
Rivervale |
7.6 months |
Lidcombe |
Above 12 months |
|
St James |
8.8 months |
Homebush |
Above 12 months |
|
South Guildford |
6.5 months |
Mascot |
Above 12 months |
|
Zuccoli |
10.1 months |
West Melbourne |
Above 12 months |
|
Riverton |
6.6 months |
Subiaco |
7.8 months |
|
Bellamack |
8.2 months |
Sydney Olympic Park |
Above 12 months |
|
Lynwood |
7.5 months |
Canterbury |
10.6 months |
|
Bakewell |
8.6 months |
Haymarket |
Above 12 months |
|
Woodroffe |
7.2 months |
Mosman Park |
9.6 months |
|
Cockburn Central |
Above 12 months |
Cabramatta |
6.8 months |
|
Driver |
6.5 months |
Nedlands |
Above 12 months |
|
Johnston |
6.9 months |
Arncliffe |
Above 12 months |
|
Waterford |
Above 12 months |
Parap |
9.1 months |
|
San Remo |
6.7 months |
Jolimont |
10.9 months |
|
Vineyard |
Above 12 months |
Notting Hill |
10.6 months |
Ms Morgan said investors must ensure that they are not investing in an area under a lull, especially given the increasing interest rates.
“It is becoming even more important for property investors to identify the best investment locations, and to avoid those that are unlikely to give them a strong financial return,” she said.
“Some of these locations have been stinkers for a long time, others, though, have been good places to invest in the past and might again be good places to invest in the future — right now, though, I would advise property investors to avoid these markets, because there are much better alternatives.”
—
Photo by @kaip on Unsplash.
