Perth takes Sydney’s crown in latest Top 100 investment suburbs list: YIP magazine

South Brisbane has been ranked as the top investment suburb in Australia, according to Your Investment Property magazine's (YIP) annual Top 100 Suburbs report, having not even made the top 100 last year.

It is however by no means the exception, with seven out of this year's top 10 suburbs not making it onto last year’s list at all.

The 2012 top 10 is notable for the inclusions of six Perth suburbs close to the CBD and the disappearance off the top 100 list entirely of the fashionable Sydney inner city suburb of Potts Point and the outlying suburbs of Jannali and Mount Colah.

Newtown, in Sydney's inner west, which ranked fifth last year, has dropped to 17th in the 2012 survey.

The results highlight the fleeting, temporal nature of many so-called investment hotspots.

John Edwards CEO of Residex, suggests investors need to keep in mind that locations that already have a reputation for being a hotspot have most likely passed the invest-by-date by the time you actually find out about them in the published hotspots lists.

The Residex boss says a current “gem” is just that – current– and the opportunity to maximise returns has passed. He suggests finding an unpolished gem ought to be the aim.

The six suburbs that have leapt into the 2012 top 10 – having not rated a mention at all in 2011 – are all within 15 kilometres of the Perth CBD, demonstrating the impact the resources boom is having on sentiment about the Perth market.

In total, nine out of the top 20 placed suburbs are within 15kms of the Perth CBD.

Perth also just nudges Sydney in the total suburbs count with 18 suburbs compared to 17 in the NSW capital.

There are 16 in Brisbane, six in Adelaide and just four in Melbourne.

Last year Sydney had 25 suburbs in the top 100, Melbourne and Brisbane 12 each and Perth.

Source: Your Investment Property magazine

Last year’s top ranking suburb, the inner city Sydney suburb of Alexandria, this year ranked seventh while Newtown dropped to 17^th and Potts Point and Jannali disappeared off the list entirely.

Source: Your Investment Property magazine

The report notes that Perth metropolitan suburbs have performed the strongest in the top 100 list and are “currently presenting opportunities for investors to pick up very affordable properties with great access to all the amenities of the city and plenty of room for growth”.

“The CBD and surrounding markets are also expected to benefit from the mining boom, as many of the companies involved base their operations in Perth, which creates an influx of high-earning professionals renting in the area,” says YIP.

The top ranking Perth suburb of Morley (number two on the top 100) has a median house price of $470,000 and unit price of $330,000 with a rental yield of 4.26%.

Morley house prices are rising by 11.6% per annum and units rising 11.4% per annum with the suburb picked for its affordable prices, large blocks with the opportunity to renovate, great amenities and infrastructure, strong rental demand and low stock on market.

According to RP Data’s Tim Lawless, Morley, like most of Perth, has reached or is close to the bottom of the market and is set to bounce back.

Similarly Como (which ranks fourth) has comparable rates of house and unit price growth as Morley, is picked for its location, trendy entertainment area and character homes.

Local agent, Liz Sterzel from Property Wizards, describes Como as “the best place to live in Perth”.

The results of the survey are based on the input of nine property analysts including RP Data’s Tim Lawless, Hotspotting.com.au’s Terry Ryder, Sam Saggers of Positive Real Estate, Charles Tarbey of Century 21 and Aaron Maskrey of PRD Nationwide overlayed with analysis by the magazine.

While these analysts all participated in compiling the list, they did not necessarily agree with every suburb that made it onto the Top 100, or the rankings.