Unit hotspots less hit and more miss: Broome, Newcastle and Gladstone among markets that flopped in 2012

Unit hotspots less hit and more miss: Broome, Newcastle and Gladstone among markets that flopped in 2012
Unit hotspots less hit and more miss: Broome, Newcastle and Gladstone among markets that flopped in 2012

Just over a quarter of the unit hotspot suburbs picked by Australian Property Investor (API) magazine in its 2012 Hot 100 list outperformed the national unit market in terms of capital growth over the past year.

Mining towns like Gladstone and Mackay were among those that fizzled badly, analysis by Property Observer can reveal.

Of the 62 unit hotspots from the 2012 Hot 100 list where comparison are possible, only 16 suburbs managed capital appreciation greater than the 2.4% rise in national unit prices recorded for the year to December 2012 as measured by Australian Property Monitors (APM).

This follows Property Observer revealing earlier this week that of the 90 hot spot suburbs for detached houses where comparison were possible, 25 locations recorded declined of 1% or more over the year, 19 locations treaded water, 34 recorded gains of between 1% and 10% in their median house prices and 12 managed gains of more than 10%.

The Property Observer analysis is based on APM median sales figures for the 12 months to January 2013 as quoted by API Magazine in its latest Hot 100 flagship issue.

The APM figures show that more than half of the 62 suburbs recorded price declines over the year to January compared with expectations that suburbs on the list should demonstrate capital growth over a 12 month period and beyond as part of a long-term investment play.

Notable unit failures were the WA tourism-focused town of Broome (unit prices down 22.8%) and mining-influenced Newcastle (-16.4%), Mackay (-15.9%) and Gladstone (-11.1%).

Worst of the bunch was Norwood, a suburb just 3 kilometres from the Adelaide CBD, where the median unit price fell 28% from $461,000 as of December 2011 to $328,000 as of January 2013.

Reasons for Norwood’s inclusion in 2012 include its seemingly good local council which “supports community sentiment and maintains standards”, its close proximity to the CBD and bus connections (though no train) and the appeal of its main street as a “popular shopping, dining and entertainment precinct”.

However, Norwood has been axed from the 2013 Hot 100 list, which features just three South Australian suburbs on its list and has totally excluded the inner suburbs of Adelaide.

South Australian suburbs on the 2013 list are Hackam West on the south eastern outskirts of Adelaide, the rural Riverland regional town of Renmark and mining town of Whyalla, despite the shelving of the Olympic Dam expansion project.

The second-worst performer was Broome in the Kimberley region, where median have fallen 22.8% over the comparison period.

Located 1,680 kilometres north of Perth and famous for its pearling, fishing and tourism industry, Broome made it onto last year’s list because of its proactive local council, good flight connections and a good mix of services and amenities including two major shopping centres, a university and a TAFE.

However, despite all of this, the median Broome unit price fell from $453,000 to $350,000 over the 12 months to January 2013.

Broome is not included on the 2013 Hot 100 list.

At the other end of the spectrum, Belmont, 7 kilometres north east of Perth, was the standout unit performer from the 2012 Hot 100 managing a 32% rise in its median unit price as was the South Australian mining town of Roxby Downs (up 29.6%) and Mandurah (17%), listed as a "lifestyle" location by API Magazine, 65 kilometres south of Perth.

The high number of suburbs where unit prices went backwards rather than forwards, as anticipated by API Magazine, highlights the challenges faced in picking hotspots and the importance of doing your own research.

In its guide to this year’s list API Magazine tells readers they should not buy a property in a location “just because it’s in the Hot 100”

“This list isn’t your due diligence. You must do your own detailed homework into any area you’re going to invest in, as well as the property type,” says API.

Suburb 12 month change in median unit prices to Jan 2013 (units)
Norwood, SA -28.00%
Broome, WA -22.80%
Carindale, QLD -21.50%
Toorak property -17.30%
Dunsborough,WA -16.50%
Newcastle, NSW -16.40%
Mackay, QLD -15.90%
Chermside, QLD -15.70%
Broadmeadows, VIC -15.60%
Parap, NT -12.20%
Gladstone, QLD -11.10%
Toorak property -11.10%
Toorak property -10.50%
NUNDAH, QLD -10.30%
Toorak property -10.00%
Port Lincoln, SA -9.70%
Toorak property -9.00%
Bunbury, WA -7.20%
Toorak property -6.20%
Townsville, QLD -5.50%
Toorak property -5%
Erskineville, NSW -4.60%
Toorak property -4.40%
Toorak property -3.60%
Enmore, NSW -3.50%
Mentone, VIC -2.60%
Toorak property -2.50%
Como, WA -2.40%
Northcote, VIC -1.90%
Toorak property, QLD -1.60%
Armadale, WA -1.40%
Toorak property -1.40%
Fremantle, WA -1.40%
Kellyville, NSW -0.90%
Orange, NSW 0.00%
Toorak property, VIC 0.00%
Midland, WA 0.30%
Sherwood, QLD 1.00%
Joondalup, WA 1.40%
Turner, ACT 1.50%
Toorak property, VIC 1.60%
Toorak property 1.70%
Toorak property 2.40%
Dickson, ACT 2.50%
Box Hill, VIC 2.60%
Toorak property 2.70%
Highgate, WA 3.80%
Osbourne Park, WA 4.10%
Toorak property 4.10%
Toorak property, NSW 5.20%
Perth CBD, WA 5.50%
Magill, SA 5.60%
Toorak property, NSW 6.30%
Camperdown, NSW 6.60%
Toorak property 7.00%
Willetton, WA 8.90%
Footscray, VIC 11.60%
Warrnambool, VIC 12.50%
Hamilton Hill, WA 14.80%
Mandurah, WA 17.00%
Roxby Downs, SA 29.60%
Belmont, WA 32%

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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