Investors might need to reassess plans to invest in properties in New South Wales and Victoria. An industry professional recommends scoring properties at suburbs in Brisbane, Adelaide, Perth, and Launceston, Tasmania instead.
“I'm not into hot spots, because hot spots end up being ‘not spots.’ What tends to happen is everyone rushes into them for the wrong reasons,” Know How Property Finance founder Bushy Martin told Daily Mail Australia.
He also advised potential investors to avoid provincial regional centres of Newcastle, Geelong, and Canberra.
Places in south-east Queensland, Perth, Adelaide and Launceston in Tasmania — where a three-bedroom house costs less than $250,000 — are ideal for those looking to snap up and rent out a house for the next 10 to 15 years, according to Martin.
“That's where you're going to get the maximum capital growth,” he said.
Property seekers could also explore suburbs that are more likely to gentrify, and those that are not surrounded by hectares of vacant land. Martin also recommends areas where prices are recovering.
“What we're looking for is strong and growing incomes – people will continue to be able to pay more for property in that location,” he told Daily Mail Australia.
Martin also ruled out apartments from the possible options for investment. “They just don't fly that well for capital growth. There's just a glut of those generally around the nation,” he said.
Where to invest
Located 9km north of Brisbane's city centre, Chermside and Springfield Lakes near Ipswich are identified as the strongest-growth prospects in south-east Queensland.
Daily Mail Australia reported that Brisbane’s median house price is at $532,308. For that value, it is possible to buy a three-bedroom house at Chermside.
Hendra is another standout for its proximity to good transport links. Houses in the Ipswich council area, meanwhile, are good choices for investors with less to spend. Houses at Springfield Lakes, a master-planned suburb, are selling for $400,000.
“That area has potential at the lower price point,” Martin said.
In Adelaide, Rostrevor was deemed as a good investment because it is a middle-class area that is home to good schools. The suburb is also cheaper than gentrified Norwood but affordable enough to record future price growth.
“One of the key drivers in Adelaide, more than so than other states, [is] the school catchment areas,” Martin said. “There are some very good schools a stone's throw from Rostrevor and people will move - both to purchase and to rent – to get their kids into the right school.”
Median house prices in the South Australian capital have risen by 0.3% during the previous year.
Houses near the beach in Perth's western suburbs are also regarded ideal despite the four-year price slump in the capital. Perth's median house prices have declined by 8.3% to $463,317 in 2018.
Martin, though, said that Perth is showing some signs of improvement. He recommended beachside suburbs from Stirling to Cottesloe.
“Rental vacancies have dropped back substantially. There [has] been some very positive movement in the resources sector generally which tends to drive the market in Perth,” Martin told Daily Mail Australia.
Launceston in Tasmania was shaping up as an even better long-term prospect than Hobart, according to Martin. Median prices in the city rose by 6.3% in the year to April.
The federal, state, and local governments are also injecting funds into the area. This forms part of the Launceston City Deal, a five-year program created to boost employment and population growth.
