Margaret Lomas warns off Sydney, but likes the NSW Central Coast

Margaret Lomas, founder of Destiny Financial Solutions, has told the Australian Financial Review she recommends avoiding Sydney altogether.

She suggests those who stick to the inner and middle ring suburbs are likely to overpay.

Saying it will be a different matter when rates rise, Lomas says 'try the up and coming markets."

"Those areas which have the underlying fundamentals and display exceptional growth drivers, but for some reason doesn't yet have the buyer demand that makes it a healthy market," she says.

Lomas likes the NSW central coast, including regions such as Bateau Bay where properties can be bought in the low $300,000, an equivalent rental yield of 6%.

She suggests areas north of Wyong such as Blue Haven and Lake Haven are also worth a look.

Her top picks in Brisbane include the north and south. Suburbs such as Morayfield, Deception Bay and Redcliff Peninsula all offer low buy-in prices, yields above 5 per cent and are likely to attract young families in the years ahead.

In Victoria, Lomas recommends staying away from regional areas such as Ballarat where spruikers have moved in, pushing up prices.

Lomas told AFR readers she see value in areas investors might normally be reluctant to buy in such as Tarneit and Narrewarren.