Negotiation tables across some of the booming investment-grade suburbs over the past decade are now turning in favour of investors.
A new study by Well Money identified 20 suburbs where investors have the edge to bargain, as vendors would only have to give up a fraction of the profits the property made over the past 10 years if they were to give even a 10% discount.
Of the 20 suburbs, 13 are from New South Wales, five from Queensland, and one each from Victoria and Tasmania.
Well Money CEO Scott Spencer said some investors have been waiting on the sidelines amid uncertainty over interest rates and inflation, but there are locations across the country where they could already break into with confidence.
“Every one of these 20 suburbs has enjoyed a net price gain of at least 107% over the past decade; furthermore, they all have a vacancy rate under 1.5%,” he said.
“The data suggests these are locations that would be easy for investors to rent out right now and would probably enjoy strong capital growth over the long-term.”
State |
Suburb |
Property type |
10-year gain |
NSW |
St Huberts Island |
House |
174% |
NSW |
Empire Bay |
House |
174% |
QLD |
Tugun |
House |
151% |
QLD |
Currumbin Waters |
House |
151% |
NSW |
Woongarrah |
House |
135% |
QLD |
Twin Waters |
House |
132% |
NSW |
Horningsea Park |
House |
118% |
NSW |
Bilambil Heights |
House |
118% |
NSW |
Winmalee |
House |
117% |
TAS |
Hobart |
Unit |
116% |
NSW |
Albion Park |
House |
116% |
NSW |
Ropes Crossing |
House |
116% |
NSW |
Unit |
116% |
|
VIC |
Marong |
House |
115% |
NSW |
Cooranbong |
House |
115% |
NSW |
Prestons |
House |
114% |
NSW |
Fern Bay |
House |
114% |
NSW |
Hamilton North |
House |
114% |
QLD |
Little Mountain |
House |
107% |
QLD |
Meridan Plains |
House |
107% |
Mr Spencer said the falling demand and the high price growth in these areas are putting investors at a comfortable spot to negotiate if they are intending to buy.
“If investors reacted by offering a 10% discount, they'd know vendors would probably be able to accept because they'd be surrendering only a small share of the considerable profit they'd made over the past decade,” he said.
Still, it is important for investors to carefully examine their financial position before taking action — Mr Spencer said it is risky to buy if buffers were not in place, especially with the expectations of further rate hikes.
“For those investors who are financially secure, these 20 suburbs are worth considering as possible locations in which to invest,” he said.
—
Photo by @kapischka on Unsplash.
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