120 Suburbs by Investment Strategy Type

By MoneyQuest posted on February 28, 2013

The top 24 suburbs for a range of investment strategies and the 24 suburbs to avoid. If you’re after High Yield, Capital Growth, Low risk, Flips. We have a list for you…

Can’t get enough hot spots? Here’s another 120 suburbs worth considering. Using our own demand to supply ratio calculations, we’ve pulled out the top 24 suburbs for a range of strategies and threw in another 24 suburbs to avoid.

As we all know, every investor is unique. Some investors have loads of equity but poor cash flow. Some have good cash flow but little equity. Some investors have lots of spare time while others have to look hard to find it. Some are close to retirement while others are early in their accumulation phase. Some have a penchant for renovations, others just want to buy and hold.

To help you kick start your research, we’ve compiled a list in the following tables catering to a range of strategies and sourced using the demand to supply ratio (DSR) data for October 2012. A few restrictions were applied:

Only markets with a statistical reliability of 62.5% or higher were allowed. This equates to a statistical reliability of 5 or higher out of 8.
Only markets with a decent level of stock on market (SOM) were considered. If the SOM is too low, you can’t find anything to buy. So all markets shown had at least seven properties for sale at the time the data was accumulated.
We’ve chosen markets based firstly on DSR and secondly on another key statistic like “yield” or “typical value”. The DSR should be your first consideration for a healthy market to invest in.
Some investors don’t want to buy in areas they have no prior knowledge of, so we’ve included the top markets in each state rather than the top markets in Australia. This is in case one state dominated a particular list. So some of these locations may not have a very high DSR.

These kind of lists should only be used as a starting point of further due diligence. As with all statistics, be sure to apply some sanity check to the data by performing your own fundamental research. Check that the data makes sense and is still current.

Top 24 high yield, excellent growth markets

Capital growth is what makes investors truly wealthy. But you can’t ignore cash flow. Table 1 lists the top three markets in each state that have both excellent potential for capital growth and great cash flow too. Keep in mind that these are the typical yields for each market. There are likely to be individual properties for sale in these markets that have yields higher than the average for that market.

Table 1: HIGH GROWTH – HIGH YIELD
State	Postcode	Locality	Dwelling	Typical	DSR	Reliability	Yield
NT	800	DARWIN	Units	$470,500	24	6.8	8.84%
TAS	7016	RISDON VALE	Houses	$166,500	29	7.2	7.81%
WA	6066	BALLAJURA	Houses	$400,000	37	7.7	7.69%
TAS	7018	BELLERIVE	Units	$209,250	33	5.1	6.79%
VIC	3350	BALLARAT NORTH	Houses	$205,000	33	6.9	6.74%
SA	5041	PANORAMA	Houses	$537,500	32	7.3	6.66%
NSW	2146	TOONGABBIE	Units	$276,000	38	7.1	6.56%
ACT	2905	THEODORE	Houses	$471,500	34	7.4	6.54%
QLD	4107	SALISBURY	Houses	$393,500	33	7.6	6.51%
QLD	4120	GREENSLOPES	Units	$337,625	35	7.6	6.48%
NT	830	DURACK	Houses	$520,000	32	6.5	6.33%
WA	6023	DUNCRAIG	Houses	$615,000	37	7.3	6.32%
NSW	2015	ALEXANDRIA	Units	$478,875	38	7.9	6.31%
WA	6149	LEEMING	Houses	$610,000	38	7.9	6.09%
VIC	3160	BELGRAVE HEIGHTS	Houses	$415,500	34	6.2	6.08%
TAS	7018	MORNINGTON	Houses	$253,500	30	6.9	6.06%
NT	832	ROSEBERY	Houses	$611,000	31	6.9	5.96%
NSW	2145	PENDLE HILL	Units	$326,988	38	7	5.95%
QLD	4740	OORALEA	Houses	$552,500	35	5.7	5.76%
ACT	2615	MELBA	Houses	$455,000	35	7.1	5.72%
ACT	2904	MONASH	Houses	$527,500	31	7.9	5.67%
SA	5158	TROTT PARK	Houses	$320,375	33	7.5	5.58%
VIC	3160	TECOMA	Houses	$367,000	35	6.7	5.56%
SA	5039	CLARENCE GARDENS	Houses	$353,688	35	7.1	5.51%

Top 24 cheap suburbs with excellent growth potential

If you’re a little short on equity or serviceability, you may need to go cheap. Table 2 lists the top markets for immediate capital growth by DSR but with affordable prices.

Table 2: HIGH GROWTH & CHEAP
State	Post code	Locality	Dwelling type	Typical value	DSR
TAS	7016	RISDON VALE	Houses	$166,500	29
NSW	2306	WINDALE	Houses	$200,500	34
VIC	3350	BALLARAT NORTH	Houses	$205,000	33
TAS	7018	BELLERIVE	Units	$209,250	33
QLD	4350	NORTH TOOWOOMBA	Houses	$226,250	32
NSW	2770	EMERTON	Houses	$243,300	35
VIC	3356	DELACOMBE	Houses	$243,500	31
NSW	2259	MANNERING PARK	Houses	$246,000	33
TAS	7018	MORNINGTON	Houses	$253,500	30
WA	6051	MAYLANDS	Units	$260,000	35
WA	6050	MOUNT LAWLEY	Units	$264,000	35
VIC	3556	CALIFORNIA GULLY	Houses	$267,500	32
SA	5161	REYNELLA	Houses	$268,000	32
WA	6014	WEMBLEY	Units	$270,000	32
SA	5098	INGLE FARM	Houses	$276,000	30
QLD	4350	CENTENARY HEIGHTS	Houses	$277,500	33
QLD	4812	GULLIVER	Houses	$286,000	32
SA	5034	CLARENCE PARK	Units	$286,250	31
NT	810	NIGHTCLIFF	Units	$314,500	26
NT	850	KATHERINE	Houses	$335,500	25
ACT	2912	GUNGAHLIN	Units	$340,000	28
ACT	2606	PHILLIP	Units	$358,000	27
ACT	2617	BRUCE	Units	$371,750	30
NT	810	RAPID CREEK	Units	$428,250	19

Top 24 suburbs for renovation flips

If you’re planning to buy, renovate and then sell, you’ll need to know that the market you’re investing in will support a quick sale. Table 3 is a list of markets with high DSR as well as low days on market (DOM).

Table 3: HIGH GROWTH – QUICK SALE
State	Postcode	Locality	Dwelling	Typical	DSR	Days on market
NSW	2233	ENGADINE	Units	$396,250	39	26
NSW	2223	MORTDALE	Units	$420,750	35	35
NSW	2015	ALEXANDRIA	Houses	$806,750	33	36
VIC	3066	COLLINGWOOD	Houses	$742,000	31	36
VIC	3084	HEIDELBERG	Units	$472,500	32	37
VIC	3136	CROYDON HILLS	Houses	$493,500	37	38
ACT	2904	FADDEN	Houses	$589,000	32	39
ACT	2615	MELBA	Houses	$455,000	35	42
ACT	2602	O’CONNOR	Houses	$803,000	31	42
QLD	4740	OORALEA	Houses	$552,500	35	53
WA	6155	WILLETTON	Houses	$611,250	38	61
QLD	4054	KEPERRA	Houses	$429,875	31	62
WA	6022	HAMERSLEY	Houses	$524,000	34	64
WA	6026	KINGSLEY	Houses	$576,750	35	65
QLD	4812	GULLIVER	Houses	$286,000	32	66
TAS	7000	MOUNT STUART	Houses	$334,530	28	74
SA	5039	CLARENCE GARDENS	Houses	$353,688	35	75
TAS	7053	TAROONA	Houses	$411,375	32	78
SA	5083	NAILSWORTH	Houses	$537,000	29	84
SA	5095	POORAKA	Houses	$316,500	30	88
TAS	7000	WEST HOBART	Houses	$407,500	29	89
NT	832	GUNN	Houses	$514,250	30	127
NT	820	BAYVIEW	Houses	unknown	23	136
NT	830	DURACK	Houses	$520,000	32	150

Top 24 low risk suburbs

If you’re worried about a newly purchased investment property experiencing an extended vacancy period, you’ll be interested in the data in table 4 which shows high DSR markets with low vacancy rates. The list compiled also considered the proportion of renters in the market. A low proportion is preferable so there is less competition amongst landlords for tenants.

Table 4: HIGH GROWTH – LOW RISK
State	Postcode	Locality	Dwelling	Typical	DSR	Reliability	Yield
ACT	2904	GOWRIE	Houses	$544,500	27	0.00%	15.80%
NSW	2120	WESTLEIGH	Houses	$771,050	36	0.00%	8.70%
NSW	2228	YOWIE BAY	Houses	$814,000	35	0.00%	9.70%
NSW	2251	BENSVILLE	Houses	$432,500	33	0.00%	8.10%
QLD	4156	MACKENZIE	Houses	$592,000	28	0.00%	9.00%
QLD	4069	BROOKFIELD	Houses	$1,115,000	26	0.00%	6.90%
QLD	4157	SHELDON	Houses	$737,059	24	0.00%	6.30%
SA	5051	HAWTHORNDENE	Houses	$427,500	31	0.00%	9.20%
SA	5126	FAIRVIEW PARK	Houses	$341,250	29	0.00%	9.70%
SA	5051	COROMANDEL VALLEY	Houses	$443,000	27	0.00%	7.00%
TAS	7024	CREMORNE	Houses	$272,375	25	0.00%	12.30%
TAS	7011	AUSTINS FERRY	Houses	$268,000	24	0.00%	13.70%
VIC	3765	MONTROSE	Houses	$434,000	39	0.00%	8.90%
VIC	3160	BELGRAVE SOUTH	Houses	$702,500	33	0.00%	9.00%
VIC	3911	LANGWARRIN SOUTH	Houses	$370,000	31	0.00%	8.10%
NT	850	KATHERINE	Houses	$335,500	25	0.11%	25.00%
NT	832	GUNN	Houses	$514,250	30	0.38%	47.70%
NT	832	ROSEBERY	Houses	$611,000	31	0.39%	31.00%
WA	6026	WOODVALE	Houses	$583,500	31	0.39%	8.70%
WA	6065	TAPPING	Houses	$480,000	31	0.40%	9.40%
WA	6065	MADELEY	Houses	$526,000	31	0.45%	9.00%
ACT	2615	DUNLOP	Houses	$480,250	31	0.47%	17.10%
ACT	2906	CONDER	Houses	$440,000	32	0.67%	17.70%
TAS	7025	RICHMOND	Houses	$297,500	27	0.96%	14.90%

Top 24 high growth potential

The key to profitable property investment is invariably strong capital growth. The DSR combines a number of statistics into an overall score of the potential for capital growth due to the imbalance of demand and supply. Table 5 shows a list of the top scoring markets for each state by DSR.

Table 5: HIGHEST GROWTH POTENTIAL
State	Post code	Locality	Dwelling type	Typical value	DSR
NSW	2227	GYMEA	Units	$454,500	40
NSW	2233	ENGADINE	Units	$396,250	39
NSW	2077	HORNSBY	Units	$438,750	39
VIC	3765	MONTROSE	Houses	$434,000	39
WA	6155	WILLETTON	Houses	$611,250	38
WA	6149	LEEMING	Houses	$610,000	38
VIC	3136	CROYDON HILLS	Houses	$493,500	37
WA	6023	DUNCRAIG	Houses	$615,000	37
SA	5097	ST AGNES	Houses	$357,500	36
VIC	3068	FITZROY NORTH	Units	indeterminate	36
ACT	2615	MELBA	Houses	$455,000	35
QLD	4120	GREENSLOPES	Units	$337,625	35
QLD	4121	HOLLAND PARK	Houses	$577,500	35
QLD	4740	OORALEA	Houses	$552,500	35
SA	5039	CLARENCE GARDENS	Houses	$353,688	35
ACT	2905	THEODORE	Houses	$471,500	34
SA	5158	TROTT PARK	Houses	$320,375	33
TAS	7018	BELLERIVE	Units	$209,250	33
ACT	2906	CONDER	Houses	$440,000	32
NT	830	DURACK	Houses	$520,000	32
TAS	7053	TAROONA	Houses	$411,375	32
NT	832	ROSEBERY	Houses	$611,000	31
TAS	7008	LENAH VALLEY	Houses	$356,000	31
NT	832	GUNN	Houses	$514,250	30

24 low growth potential, best to avoid

Some markets have an over-supply or are in low demand from buyers. These markets are best to avoid since they are unlikely to deliver much in the way of capital growth. Table 6 shows a list of the lowest markets by DSR for each state. Note that some of them aren’t that bad. If you have a unit in Greenway ACT or Rapid Creek NT for example, don’t feel
pressured to sell.

Table 6: LOWEST GROWTH POTENTIAL
State	Post code	Locality	Dwelling type	Typical value	DSR
TAS	7270	KELSO	Houses	$337,500	5
TAS	7316	SULPHUR CREEK	Houses	$274,938	7
VIC	3809	OFFICER	Houses	$576,000	7
NSW	2488	CABARITA BEACH	Houses	$410,000	8
NSW	2538	MILTON	Houses	indeterminate	8
QLD	4877	PORT DOUGLAS	Houses	$373,000	8
TAS	7307	SHEARWATER	Houses	$372,000	8
VIC	3059	GREENVALE	Houses	$608,500	8
QLD	4565	BOREEN POINT	Houses	$437,000	9
QLD	4677	AGNES WATER	Units	$355,000	9
WA	6798	CHRISTMAS ISLAND	Houses	$445,000	9
NSW	2108	PALM BEACH	Houses	$1,902,000	10
VIC	3008	DOCKLANDS	Units	$585,500	10
WA	6225	COLLIE	Houses	indeterminate	10
WA	6280	BUSSELTON	Houses	$411,825	10
SA	5211	ENCOUNTER BAY	Houses	$374,250	11
SA	5211	MCCRACKEN	Houses	$402,500	11
SA	5211	HAYBOROUGH	Houses	$301,000	12
ACT	2617	MCKELLAR	Units	$415,000	19
NT	810	RAPID CREEK	Units	$428,250	19
ACT	2612	TURNER	Houses	$856,500	20
ACT	2900	GREENWAY	Units	$490,000	21
NT	820	LARRAKEYAH	Units	$493,500	21
NT	820	STUART PARK	Units	$453,250	23

To discuss this article or anything to do with your finances, please call our office today and we will be happy to assist you.

Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.

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